The EU Emissions Trading Scheme and the UK Climate Change Act: a UK Perspective
The European Union Emissions Trading Scheme (EU ETS), the largest emissions cap-and-trade scheme in the world, commenced on January 1, 2005. In addition, the United Kingdom's Climate Change Act 2008 has established the world's first legally binding emissions-reduction target, which requires at least an 80% reduction on 1990 emissions levels in the United Kingdom by 2050. The following article gives a brief overview of the EU ETS and of some of the steps being taken to reach the 80% reduction target under the Climate Change Act 2008.
The EU ETS, entered into under the provisions of the European Union (EU) Emissions Trading Directive, represents one of the steps taken by the EU to meet its greenhouse-gas-emissions reduction target under the Kyoto Protocol. In accordance with the Kyoto Protocol, the EU is aiming to attain an 8% reduction on 1990 emissions levels during the Protocol's first "commitment period" (2008-2012), while the UK itself is seeking to achieve a 12.5% reduction in that period. The EU ETS is being rolled out in phases, the first of which ran from 2005 to 2007 and the second of which is running from 2008 until 2012. In preparation for the third phase, commencing in 2013, the EU is reviewing the Emissions Trading Directive.
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