Table of Contents: The European Union's Emissions Trading System in Perspective

Contents

Foreword ii

Executive Summary iii

I. Introduction 1

A. Motivation 1
B. Description of the EU ETS 1

II. Context 7

A. The Trial Period (2005-2007) 7
B. A Multinational System 9

III. Performance 12

A. The Emergence of a Single Price 12
B. Why EUA Prices Were So High and Then So Low 15
C. The Volume and Types of Trading 16
D. Emissions and Allowances: 2005-2006 Results 18

IV. Controversies 24

A. Windfall Profits 24
B. “Over-Allocation” 31
C. The Allocation Process 35
D. Price Volatility 40
E. Linkage 43

V. Conclusion: The EU ETS in Perspective 45

References 47

Endnotes 49