The European Union's main tool in the fight against global warming - the emissions trading scheme (ETS) – has been hailed by environmental economists as a remarkable success, despite its wobbly start.
In a new journal – the Review of Environmental Economics and Policy – the environmental economists said the EU scheme was "by far the most significant accomplishment in climate policy to date," adding that "it will be central to future global climate negotiations."
They said that "the EU ETS is an ambitious effort by the EU to correct for the market failure that surrounds climate change, and to deliver the EU's commitments to reduce carbon dioxide emissions under the Kyoto Protocol" – the international deal to cut CO2 by 8 percent below 1990-levels by 2012.
The seven economists behind the positive report are from both EU and US universities as well as environmental organisations.
The emissions trading scheme - set up in 2005 - allows industrial polluters to buy and sell pollution allowances and was the first of its kind in the world.
But the scheme has been blighted by the actions of national governments, who either handed in their national allocation plans to the commission too late or were too generous in their allowances to domestic industry.
The project has also been criticised for its weak limits on CO2 emissions and for allowing too much use of imported credits, seeing the price drop from highs of about €30/tonne of CO2 to €11 before ending last year at about €7, according to the Financial Times.
The environmental economists' evaluation of ETS' early phase said the main goal of limiting CO2 emissions is being achieved however, despite evidence that some sectors received over-generous allowances.
Member states are less positive
In the meantime, EU member states Poland and the Czech republic said on Friday (25 May) that they would take the European Commission to court over the EU executive's decision to sharply cut their carbon dioxide emission quotas for 2008-2012.
The move comes after fellow EU member Slovakia in February lodged a complaint against a commission decision to cut its allocation of carbon dioxide by a quarter between 2008 and 2012.
The commission – which is charged with approving national governments' bids for CO2 allocations – cut back Poland's proposal by 26.7 percent to 208.5 million tonnes and reduced the Czech allocation by 14.8 percent to 86.8 million tonnes.
In a very different move, Swedish environment minister Andreas Carlgren has called for the Nordic country to go beyond the EU promise of cutting 20 percent of carbon dioxide emissions by 2020 and to cut 30 percent of its emissions.