Issues in the implementation of greenhouse gas emissions trading in Europe

Ironically, emissions trading proposals to implement the Kyoto Protocol are being proposed in Europe, not among the nations usually associated with such measures. This article identifies and discusses very briefly the main issues that will have to be considered in adopting a national system of CO2 emissions trading. These issues are: allocation of permits and monitoring, penalties and liability for non-compliance, comprehensiveness of the emissions cap, integration with renewable energy certificates, integration of sinks and other gases with carbon trading, and cost caps and escape valves. Assuming the current proposals are adopted, Europe bids fair to become the test-bed in which the rules of an eventual international system will be developed in process not unlike that characterizing the development of the European Union. The European challenge is then both inward, to Europe, to go beyond proposals and to resolve the issues identified here, and outward, to other nations, to take similar steps in matching deed with advocacy. (author)