It looks like you've previously blocked notifications. Please update your browser permissions to allow them. The European Union has long prided itself on taking the lead in tackling climate change.

So what's the problem? And can it be fixed? Let's start with some background. Companies get a certain number of pollution permits that they can trade among themselves. As the cap ratchets down each year, the number of permits is supposed to dwindle and the "price" on pollution keeps rising. Over the last few years in Europe, however, there has been a glut of permits. Policymakers initially gave too many away, and then there was a huge recession. Companies have little incentive to make any drastic changes.

The European Commission wanted to change this by delaying a scheduled release of new permits.

So what can we learn from all this? There are a couple big things going on here:. Since the ETS came into existence, Europe has been meeting its emissions goals. This is, essentially, how cap-and-trade is supposed to work. If the euro zone ever recovered from its pit of endless despair, then the price of polluting would presumably rise again.

The EU Emissions Trading System (EU ETS) | Climate Action

This is a point Poland keeps making, as FT Alphaville's Kate Mackenzie points out — and this was the Polish delegation's reason for opposing tweaks to the system: No administrative meddling is needed or else we might create the impression that such measures are standard practice. Now, Poland's position is arguably too sanguine.

Europe's cap-and-trade program has a number of other flaws that may need fixing, like the fact that policymakers gave away too many permits initially. Still, there's an argument that low prices aren't inherently a problem. Many politicians and analysts weren't satisfied with simply staying under the cap. They wanted a high price on carbon that would drive big changes to the continent's energy supply.

And, it's true, the ETS wasn't providing that. David Hone of Shell had been making a similar argument. And since CCS is a difficult technology to develop, utilities need to start working on it now, or they'll never be able to deploy it in time to cut emissions sharply by Yet the price on carbon isn't nearly high enough to spur CCS development.

Even for people who aren't fans of natural gas or CCS, the same argument holds. Companies aren't going to develop complicated clean-energy technologies of the future without a much higher price on carbon. German economist Hans-Werner Sinn has made this point often.

Emissions trading - Wikipedia

Since utilities and companies already are already required to meet those, they have a much easier time meeting their pollution targets. So, naturally, that puts downward pressure on carbon prices in the trading scheme. When you add these all up, it's hard to escape the idea that many people in Europe seem to want a carbon tax. A carbon tax that rises slowly over time would keep the price of emitting greenhouse-gases stable — and the price would remain high even if European policymakers wanted to tack on renewable mandates and other policies.

Oxford's Hans Dieter has used this graph to make the point:. But many policymakers seem to find that flexibility in cap-and-trade a problem. Trouble is, there's no reason whatsoever to think a carbon tax would be politically easy. For one, any major change to the E.

All 27 countries would need to take a vote. And countries like Poland, for one, seem quite happy with the current low pollution prices. That means Europe is likely stuck with trying to reform its cap-and-trade program. According to Point Carbon, further big changes aren't likely to happen until at the earliest. In any case, Europe's experience will certainly provide a lesson to other countries.

Australia is currently preparing its own cap-and-trade system assuming that the Liberals don't come to power and scrap it , and a cap in California just went into effect.

The European Commission proposed the change to the cap-and-trade system and the European Parliament voted it down. Here's how it's working. SuperFan badge holders consistently post smart, timely comments about Washington area sports and teams.

More about badges Request a badge. Culture Connoisseurs consistently offer thought-provoking, timely comments on the arts, lifestyle and entertainment. Fact Checkers contribute questions, information and facts to The Fact Checker.

Washingtologists consistently post thought-provoking, timely comments on events, communities, and trends in the Washington area. Post Forum members consistently offer thought-provoking, timely comments on politics, national and international affairs. Weather Watchers consistently offer thought-provoking, timely comments on climates and forecasts. This commenter is a Washington Post contributor. In some cases, contributors are sources or experts quoted in a story.

Comments our editors find particularly useful or relevant are displayed in Top Comments , as are comments by users with these badges: Replies to those posts appear here, as well as posts by staff writers. To pause and restart automatic updates, click "Live" or "Paused". If paused, you'll be notified of the number of additional comments that have come in.

Turn on desktop notifications? Accessibility for screenreader Home Page U. Share on Google Plus. Be the first to know about new stories from PowerPost. Can it be fixed? By Brad Plumer By Brad Plumer April 20, Follow bradplumer. Not sure what's going on here, but it's a dramatic Europe-related image. Leaf Page Test - Wed Jun 21 Had this been an actual emergency, you would have been instructed where to tune on your radio dial. You must be logged in to report a comment. You must be logged in to recommend a comment.

All comments are posted in the All Comments tab. Spam Offensive Disagree Off-Topic. Among the criteria for featured comments: State Department issues unusual public warning to Saudi Arabia and UAE over Qatar rift. Analysis Trump calls Ukraine the thing Ukrainians hate the most.

Saudi king names son as new crown prince, upending the royal succession line. Trump seeks sharp cuts to housing aid, except for program that brings him millions. The story must be told.

Check your inbox for details. You might also like: Sign Up No Thanks.

EU Emissions Trading Scheme (EU ETS)

Read content from allstate. Content from Allstate This content is paid for by an advertiser and published by WP BrandStudio. The Washington Post newsroom was not involved in the creation of this content. Learn more about WP BrandStudio.