10 Pages Posted: 30 May 2015
Date Written: May 29, 2015
Although the EU ETS has been operating now in three trading phases for ten years and has been extensively covered by legal research, there has been remarkably little attention for the enforcement of the ETS. Although, generally, we have seen an increasing centralization of the EU ETS, monitoring and enforcement still are largely in the hands of the emissions authorities in the states in which the EU ETS operates: 28 EU Member States plus Norway, Liechtenstein and Iceland. This article reports on the main findings of an ex-post evaluation of the legal implementation of the EU ETS at Member State level with a focus on compliance. Our central research question was: Has the effectiveness of the compliance mechanism of the EU ETS improved in the third phase (2013-2020)? What further improvements (if any) are necessary? To answer this research question, we described the relevant EU law in each of the three phases, reviewed previous evaluations and relevant research projects, and evaluated the implementation of the EU ETS in selected Member States, both through existing sources and through interviews with key players in the compliance mechanism at Member State level. The Member States that we studied for the latter part of the project were Germany, the Netherlands, Hungary, Greece, Poland and the UK. We found many differences among the EU Member States and clearly Member States can learn a lot from each other’s attempt to close loopholes and fix weak spots in the compliance mechanism. Overall, more efforts should be undertaken to harmonize the practice of the national competent authorities responsible for the enforcement of the EU ETS. This is not easily achieved. The case studies clearly show that compliance assistance is regarded as the most important element of the compliance cycle of the EU ETS. Such compliance assistance is best offered at the national level in the national context. In addition, one could hold that the EU, with its extensive legislative framework for the EU ETS that was developed over the year, has exhausted its legislative powers in this field. Therefore, other forms of harmonization (e.g., network based peer review) need to be explored.
Keywords: ETS, enforcement
JEL Classification: K32
Suggested Citation: Suggested Citation