Assessing the Performance of the UK Emissions Trading Scheme

Stephen Smith, Joseph Swierzbinski

Research output: Contribution to journalArticlepeer-review

61 Citations (Scopus)


The UK's Climate Change Programme introduced an Emissions Trading Scheme (ETS) for greenhouse gases. Firms in over 40 industrial sectors which have negotiated "Climate Change Agreements" setting quantitative energy efficiency targets can use the ETS to trade over-and under-compliance with these targets. In parallel, a limited number of firms have become major participants in the ETS as a result of an auction of subsidies for additional abatement commitments. The paper describes the UK arrangements and assesses the economic efficiency and environmental effectiveness of the ETS, drawing on evidence of participants' behaviour both in the incentive auction, and in subsequent trading.

Original languageEnglish
Pages (from-to)131-158
Number of pages28
JournalEnvironmental and Resource Economics
Issue number1
Publication statusPublished - May 2007


  • emissions trading
  • tradeable permits
  • auctions
  • market efficiency
  • greenhouse gas abatement
  • climate change policies
  • rights


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