Emissions Trading in the European Union

Term Paper , 2020 , 19 Pages , Grade: 1,3

Business economics - Trade and Distribution

Climate change is a global problem. According to the majority opinion of renowned experts, humans are to blame for this development. In recent years, industrialization has caused the levels of greenhouse gases in the earth's atmosphere to rise rapidly. The consequences are clearly noticeable in our daily lives, such as rising average temperatures or more frequent extreme weather events.

Recent events, such as the diesel scandal, have fueled discussions about the CO2 tax as a more effective measure to deal with climate change. In addition, the diesel scandal showed how the environment is being negligently treated in favor of profit. This has led me to critically analyze emissions trading as one of the current environmental policy measures to reduce greenhouse gases. This is because it is seen in the EU as a particularly powerful tool for achieving climate targets. However, it often also serves as a basis for argumentation against further measures for the environment by companies. The question that occurs to me is what opportunities and risks could arise for Germany from emissions trading.

In order to be able to answer this question, it is first necessary to give an initial overview of the topic. It will be explained which functions emissions trading should fulfill and what differences there are between global emissions trading and that in the EU. I then present the scientific findings on emissions and emissions trading to date. Based on the research and the knowledge gained from it, I am able to answer the key question.
Finally, my conclusion follows.

Table of Contents

1 Introduction
1.1 Emissions Trading
1.2 Emissions Trading in the European Union

2 State of Research

3 Opportunities and Risks of EU Emissions Trading

4 Criticism of Emissions Trading
4.1 Climate Becomes a Commodity
4.2 Overallocation of Certificates
4.3 Market Stability Reserve
4.4 Criticism of Ineffective Target-Setting
4.5 Windfall Profits
4.6 CO2 Tax - A Reasonable Measure?

5 Reform of EU Emissions Trading for the 4th Trading Period
5.1 The Strengthening of the EU ETS
5.2 Maintaining the Competitiveness of Industry
5.3 Promotion of Innovation and Solidarity Measures

6 CO2 Tax as an alternative Climate Protection Mechanism

7 Conclusion: What Opportunities and Risks arise for Germany as a Result of EU Emissions Trading?

8 Bibliography

• College: BSP Business School Berlin (form. Potsdam)
• Grade: 1,3
• Author: Tim Meyer (Author)
• Publication Year: 2020
• Pages: 19
• Catalog Number: V903243
• ISBN (eBook): 9783346188281
• ISBN (Book): 9783346188298
• Language: English
• Tags: Emission, CO2 tax, Trading, E, EU ETS, Europe, Climate Change, Industry, Kyoto Protocol, Kyoto, Certificates, Greenhouse Gas