EFFICIENCY OF EUROPEAN UNION EMISSIONS TRADING SYSTEM IN REDUCING THE GREENHOUSE GAS EMISSIONS

The Emissions Trading System (ETS) has been functioning in the European Union since 2005. It is aimed at reducing the greenhouse gas emissions produced within the EU in a cost-effective and economically efficient manner. The essence of this mechanism is to limit the Skuteczność systemu handlu emisjami Unii Europejskiej… 47 total number of air pollutants produced by Member States by issuing allowances which can be freely traded by the system participants. The question that motivates this paper is whether the EU ETS was efficient enough in reducing the greenhouse gas emissions during the period of 2005–2012 and what are the prospects for the future. The first part of the article introduce the basic principles of the EU Emissions Trading System. Then the statistical data analysis provides an overview of how the EU ETS performed as a market mechanism during the 2005–2012 period and what were the changes in greenhouse gas emissions in the same time. It gives the reader a picture of how effective the system was and what to expect in the following years.