{"id":86018,"date":"2026-07-16T00:01:00","date_gmt":"2026-07-15T23:01:00","guid":{"rendered":"https:\/\/www.lse.ac.uk\/granthaminstitute\/?post_type=publication&p=86018"},"modified":"2026-07-14T14:22:07","modified_gmt":"2026-07-14T13:22:07","slug":"the-effect-of-the-eu-emission-trading-scheme-on-emissions","status":"publish","type":"publication","link":"https:\/\/www.lse.ac.uk\/granthaminstitute\/publication\/the-effect-of-the-eu-emission-trading-scheme-on-emissions\/","title":{"rendered":"The effect of the EU Emission Trading Scheme on emissions"},"content":{"rendered":"\n

Launched in 2005, the European Union’s Emission Trading Scheme (ETS) covers the greenhouse gas emissions of major industrial sectors, including power generation, industrial production and aviation. Under the EU ETS, a cap is set on the total amount of emissions allowed from these sectors. Companies operating within them must ‘surrender’ one ‘allowance’ for each tonne of carbon dioxide (CO2<\/sub>) they emit. These allowances can then be traded, enabling emissions reductions where they are most cost-effective.<\/p>\n\n\n\n

In this paper, the authors examine the effect of the EU ETS on greenhouse gas emissions between 2008 and 2023. To do this, the authors compare emissions of industrial sites covered by the EU ETS with similar-sized sites in the same sector and country not covered by the scheme (because their emissions fall below the scheme’s inclusion criteria). The authors use data from the UK, the Netherlands, France and Norway because these countries require companies to report CO2 <\/sub>emissions even at low levels.<\/p>\n\n\n\n

Key points for decision makers<\/h2>\n\n\n\n