Trading Schemes, Risks, and Costs: The Cases of the European Union Emissions Trading Scheme and the Renewables Obligation

2008 ◽  
Vol 26 (5) ◽  
pp. 938-953 ◽  
Author(s):  
David Toke
Keyword(s):  
European Union ◽  
Environmental Governance ◽  
Emissions Trading ◽  
Command And Control ◽  
False Belief ◽  
The European Union ◽  
Governance Systems ◽  
Emissions Trading Scheme ◽  
Trading Scheme ◽  
And Control

The appropriateness and importance of market-based environmental governance systems vary according to different cases. Although so-called ‘market trading’ regimes can be useful in some circumstances, a false belief in the inevitability of their cost-effectiveness compared with so-called ‘command and control’ systems has allowed policy distortions to occur. So-called ‘command and control’ policies are being underemphasised, despite the fact that they may achieve reductions in carbon emissions that are cheaper than those likely to be achieved through emissions (or ‘certificate’) trading regimes. I address theoretical arguments which I then place in context with analysis of some features of the British Renewables Obligation and the European Union Emissions Trading Scheme.

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