The European emissions trading scheme (EU ETS) is the centrepiece of Europe's climate policy. The system has been undermined variously by the weakness of its regulation, an undesirable overlap with other public policies and the far-reaching economic and financial crisis that caused the market price of allowances to plunge. This article attempts to identify the conditions for making the coming years of the EU ETS a success. It draws historical lessons from the eight years the scheme has been in operation, and then analyzes, using the ZEPHYR-Flex model, the various interventions by the public authorities currently under discussion in order to revive the market. These simulations reveal the risk of carrying forward problems to the future, with further clouding of the visibility needed by ETS actors in the long term. Finally, the article proposes to draw lessons from monetary policy by outlining what might be the mandate of an Independent Carbon Market Authority, with responsibility for the dynamic management of the supply of allowances, and whose main mission would be to ensure the optimal linkage between the different temporal horizons of the climate strategy.

Linking a cap-and-trade with an offset mechanism has many theoretical advantages: it reduces compliance costs, extends the price signal outside the cap-and-trade, and triggers technology transfer. However, it is feared that such linking will induce outsourcing of emissions reduction at a low price and undermine the price incentive in the cap-and-trade. The EU Emissions Trading Scheme (EU ETS) is the first full-scale example of a cap-and-trade system linked to project-based mechanisms such that offsets have effectively been used by industrial installations. This article is an ex post analysis of EU ETS data for the years 2008 and 2009, and the characteristics of the link and its efficiency are evaluated. Although offsets have been much used, their use is concentrated and not very intense or frequent, which allays the fear that offsets will flood the market. Although the majority of surrendered CERs effectively come from the largest and oldest projects, the credits surrendered are similar to those available on the market. Possible factors that contribute towards inefficiency are the rules for using offsets, transaction costs affecting the participation of small installations, awareness and openness to market-based instruments, and uncertainties regarding CERs offer and demand from other markets. However, the impact on EUA equilibrium price still needs to be quantified.En théorie le fait de lier le plafonnement-échanges avec un mécanisme de compensation présente de nombreux avantages: réduire le coût de conformité, étendre le signal prix à l'extérieur du périmètre de plafonnement-échanges, et déclencher le transfert de technologies. Cependant il est à craindre qu'un tel lien entraînera une délocalisation des réductions d'émissions à moindre coût et sapera l'incitation par les prix dans le système de plafonnement-échanges. Le SCEQE est le premier exemple généralisé d'un système de plafonnement-échanges lié aux mécanismes de projets par lequel les compensations sont effectivement utilisées par les installations industrielles. Cet article est une analyse ex-post de données du SCEQE pour les années 2008 et 2009, et les caractéristiques de ce lien et de son efficacité sont évaluées. Alors qu'il y a eu une utilisation importante des compensations, celle-ci est concentrée et ni très intense ni fréquente, ce qui permet d'apaiser la crainte d'un marché inondé par les compensations. Bien qu'une majorité des URCE délivrées proviennent effectivement des projets les plus larges et les plus anciens, les crédits délivrés sont similaires à ceux qui sont disponibles sur le marché. Parmi les facteurs possibles contribuant aux inefficacités, on compte les règles d'utilisation des compensations, les coûts de transaction affectant la participation des petites installations, la sensibilisation et l'ouverture aux mécanismes de marché, et les incertitudes liées à l'offre et la demande en URCE provenant d'autres marchés. Cependant, l'impact sur l'équilibre du prix du quota européen (« EUA ») doit encore être quantifié.Mots clés : plafonneme...

We build a model of competitive emissions trading under uncertainty with supply-side control. Firms can use rolling planning horizons to deal with uncertainty and can also exhibit bounded responsiveness to the control. We tailor the model to the EU ETS, calibrate it to 2008-2017 market developments and find that a rolling horizon is able to reconcile the banking dynamics with discount rates implied from futures' yield curves. We evaluate the 2018 market reform, decompose the impacts of its main features and quantify how they hinge on the firms' horizon and responsiveness. We highlight important implications for policy design and evaluation.

This paper exploits a little used data resource within the central registry of the European Union's Emissions Trading System (EU ETS) to analyze cross border trading and inter-year borrowing during the first trading period (2005)(2006)(2007). Cross-border flows were small in the aggregate but remarkably frequent in matching allowance deficits and surpluses at the installation level throughout the EU. These data also indicate that a novel feature of the EU ETS-the ability to borrow allowances from the forward allocation to satisfy current compliance requirements-was also used. These data provide evidence that the precondition of efficient abatement in a cap-and-trade system-widespread use of trading opportunities-was present in the first period of the EU ETS.