The project, supported by the Mission of Norway, focused on the EU Emissions Trading System (EU ETS) and its links to emissions reductions and innovation. The outputs of the project were:

A lunchtime meeting presenting the interim results of the research, held in CEPS on 1 December 2010, which included introductory remarks by the Norwegian Mission Ambassador, a presentation of the research results by Christian Egenhofer, and comments by Yvon Slingenberg, DG Climate Action, and Folker Franz, BusinessEurope

A paper, which integrated the research with the discussions at the event, titled « The EU Emissions Trading System and Climate Policy towards 2050 : Real incentives to reduce emissions and drive innovation ? ». The paper was authored by Christian Egenhofer, Monica Alessi, Anton Georgiev and Noriko Fujiwara and published on 12 January 2011. Focus of the report was to take stock of the EU ETS, which is presently the largest multi-sector greenhouse gas trading scheme in the world, and to review the experiences of the pilot phase (2005-2007), as well as the adjustments introduced in the second phase (2008-2012). The paper also looks ahead to the radical changes that will come into effect in the third phase starting in 2013. The assessment is based on a literature review of recently published ex-post analyses and ex-ante studies and draws as well on our own calculations. It investigates the main controversies surrounding the EU ETS, such as its environmental effectiveness, economic rents, windfall profits and fairness, the role of CDM and JI and its impact of on industrial competitiveness. It also evaluates the scheme’s ability to promote innovation and low-carbon technology deployment. Finally, the study addresses the fundamental question of whether the ETS has lived up to its promise to “promote reductions of greenhouse gas emissions in a cost-effective and economically efficient manner”, and if not, what are the prospects of its doing so in the future and what additional changes will be required.