A few little things separate a gold medal sprinter from an also-ran. The same applies to the European Union’s carbon emissions trading scheme. When it pioneered the idea of a fully fledged carbon trading market in 2005, the EU envisaged that a price of about €40 per tonne of carbon dioxide equivalent emitted would encourage big polluters, such as power generators, to invest in clean energy. With the current price at under €8, that looks like seriously wishful thinking. Yet the market is not irretrievably broken. With another phase of the trading scheme due to begin next year, there are a few things regulators could usefully do to turn carbon trading into a proper market.
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