Europe’s Carbon Market Crisis: Why Does it Matter?
The European Union's eight-year-old Emissions Trading System (ETS), the world's largest cap-and-trade carbon market, is broken.
"Now, the market is dead, as far as I can see," said Steffen Böhm, director of the Essex Sustainability Institute at Britain's Essex Business School.
What will be the aftermath of the ETS collapse? Here's a quick primer on what happened, and what it could mean elsewhere, particularly in California, which inaugurated a new carbon market at the start of this year. (Related: "California Tackles Climate Change, But Will Others Follow?")
A: The U.S. introduced the concept of using market forces to rein in greenhouse gas emissions during the talks that lead to the 1997 Kyoto Protocol, an international agreement to combat climate change. Ironically, Europe wasn't initially keen on the idea. But after it failed to enact an EU-wide carbon
