EU Emissions Trading System (ETS)

For those of you who are unaware about some of the environmental initiatives in the EU, the EU environment system is run by a ‘cap and trade’ policy whereby there is a limit on greenhouse gas emission through allowances which are distributed, auction and sold between companies in the EU. The allowance on the limit is reduced every year further, with an overall objective to reduce carbon emissions and greenhouse gases in general across the EU.

Whilst it is promising that the EU has an Emissions Trading System, the motivation behind reducing trade is a little immoral to me. Cutting emissions should be for the good of the environment rather than with economic incentives. Surely through financialising environmental emissions, this will just promote wealthier companies and increase their monopolies over the markets? I am certain it would be more effective to have a command- and- control system whereby regulations would force countries to reduce their emissions rather than delegating how much power each company should emit. This would also increase innovation rather than with this system. Anyhow either way, there is a reduction in emission levels and for that i will remain un-bitterly grateful.

Anyhow more on the EU ETS system here.


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