From emissions trading to a circular economy

Since 2005, the European Emissions Trading Scheme (EU ETS) has been the central instrument of European climate policy. It should ensure that greenhouse gas emissions are reduced where this is most cost-effective. After two decades of experience, it can be said that the system has achieved measurable emission reductions in most of the sectors involved. At the same time, however, it becomes clear that emissions trading alone is not enough to drive the comprehensive transformation of industry towards a climate-neutral and circular economy. The article "Effectiveness of EU Emissions Trading: What drives emission developments?" by Oeko-Institut and INFRAS on behalf of the German Environment Agency discusses what lessons can be learned from the development of the EU ETS in order to shape the transition from linear emission avoidance to a true circular economy.