Europe’s Emissions Trading Scheme (ETS) is by far the world’s biggest and most successful carbon market and is set to remain so for many years to come. But the explosive growth it saw from its creation in 2005 to 2009 has slowed.
Meanwhile, in the US, the prospects of a federal level carbon trading scheme are nil thanks to a political deadlock that will certainly not be broken this side of the next presidential election, if ever. There are a number of regional and state schemes, most notably the Regional Greenhouse Gas Initiative in the north-east of the country and a fledgling scheme in California, but they are under siege from legal challenges by Republican lawmakers opposed to cap and trade mechanisms.
At the same time, global climate negotiations are “locked in a deadly embrace between developed and developing countries”, and a worldwide climate agreement remains a distant prospect, says Henry Derwent, president of the International Emissions Trading Association.