EU carbon market slashes emissions by 47% in 15 years, study finds

The European Union's cap-and-trade system, known as the EU Emissions Trading System (EU ETS), has played a pivotal role in reducing carbon dioxide (CO₂) emissions across the bloc, according to a recent study. Launched in 2005, the EU ETS is the world's largest carbon market, and it has led to a 47% reduction in emissions over its first 15 years.

Aerial view of a lush green European landscape with forests, windmills, and a plane in the sky. AI generated picture.

A study published in the journal Nature reveals that without the EU ETS, CO₂ emissions in key sectors such as power production, cement, and steel would have been 15.4% higher between 2005 and 2020. This analysis was conducted by four Italian economists who used robust statistical methods and diagnostic controls and found the effect of the EU ETS to be significant.

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The EU ETS covers over 10,000 installations and airlines, accounting for approximately 38% of the EU's total greenhouse gas emissions or 1.4 billion tonnes of emissions. The study's authors, including Professor Massimo Riccaboni from IMT School for Advanced Studies Lucca, credit the system as a major driver behind the significant emissions reductions, alongside other policies like renewable energy incentives and energy efficiency subsidies.

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The EU ETS was launched in 2005, and since then, CO₂ emissions in the EU have been reduced by about 47%, with emissions decreasing by 15.5% in 2023 versus 2022. The success of the EU ETS has inspired 35 other carbon trading systems worldwide, which together cover 18% of global emissions. As the world continues to research avenues for nature conservation, the EU ETS remains a model for other countries, despite challenges.

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