The following is a letter to Luigi Zingales and Bethany McLean after listening to Season 2 Episode 76 […]
Category: Policy
In one of my first political science lectures at university, I learned about path dependency. If it has […]
“ETS, RIP – The failure to reform Europe’s carbon market will reverberate round the world” – The Economist, 2013
The European Union’s cap-and-trade scheme aiming to reduce greenhouse gas emissions has been proclaimed dead not only by The Economist. Is it really that bad? We take the United Nation’s point of view that human made greenhouse gases accelerate Global Warming. The success in the first international emission trading scheme, and until today also the world’s largest, is therefore a major milestone in fighting greenhouse gas emission. If it failed, this would be a major setback for emission reduction. So has it really failed as The Economist states?Undoubtedly, there seems to be an issue. Emission prices fell from over 30 Euro per ton of CO2 equivalent to under 5 Euro. Has oversupply destroyed the emission market and the emission trading scheme?
While southern Europe is still struggling with the European debt crisis, Germany’s economy has, despite minor dents, not come to a halt and so far has withstood any recessive tendency. Especially in Germany, people seem to see a connection between Gerhard Schröder’s Agenda 2010, which was a labor-market reform, which began in 2003. The implementation occurred mainly until 2005 and focused on a liberalization of the labor market. A Japanese researcher even claimed to have found the exact impact, which these reforms have on Germany’s current economic success (Spiegel Online, 2013).