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The Expensive Failure of Europe’s Emissions Trading Scheme: A Summary

By Matthew Sinclair -- November 3, 2009

The European Union Emissions Trading Scheme (ETS) is currently the largest cap-and-trade scheme in the world. Covering 11,500 installations and countries with a combined population of around 500 million, the scope of the scheme is truly enormous. Before Americans adopt a cap-and-trade scheme of their own, it is vital that they take a serious look at how things have gone in Europe. I hope that my study, released at the end of last week, can demonstrate some of the huge risks that the United States will face if cap-and-trade advocates get their way.

The first thing to note is that the scheme has cost European consumers a fortune. There was a total bill of €93 ($123) billion between the introduction of the scheme in January 2005 and the end of 2008.…