This article explains why the significant changes in the EU Emissions Trading System (EU ETS) for the 2013–2020 phase were adopted in 2008. The combination of a more stringent EU-wide cap, allocation of emission allowances for payment, and limits on imports of credits from third countries have strengthened the system for the post-2012 period. This will promote reduction in greenhouse gases compared to the old system. The main reasons for these changes are, first, changes in the positions of the member states due to unsatisfactory experience with performance of the EU ETS so far. Second, a “package approach” where the EU ETS reform was integrated into wider energy and climate policy facilitated agreement on the changes. Third, changes in the position of nonstate actors and a desire to affect the international climate negotiations contributed to the reform.
Decoupling the EU ETS from subsidized renewables and other demand side effects: lessons from the impact of the EU ETS on CO2 emissions in the German electricity sector