Climate change is happening and tackling it is one of the highest priorities of the European Union. Member states are unanimous in their support of the Kyoto protocol and have committed themselves to meeting the EU’s target of reducing emissions by 8 per cent by 2012. Making the political commitment was the essential first step but delivering on that commitment is the real challenge. The centrepiece of our response has been the development of the European Emissions Trading Scheme and the European carbon market.

The ETS marks a paradigm shift in European environmental policies – engaging with the private sector in searching for the most cost-effective solutions to a global problem. It is the first international trading system and the world’s largest in terms of economic coverage.