Evaluation of the UK Emissions Trading Scheme: Phase 1
Findings from the first phase of an independent ex-post evaluation of the UK Emissions Trading Scheme.
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The UK Emissions Trading Scheme (UK ETS) is a cap-and-trade scheme, which places a limit on greenhouse gas emissions in covered sectors, while incentivising emitters to decarbonise their operations. It covers:
- power generators
- operators of energy intensive industrial sites
- aircraft operators
It is run by the UK ETS Authority, an organisation comprising the UK government, Scottish Government, Welsh Government and the Department of Agriculture, Environment and Rural Affairs for Northern Ireland.
In early 2023, the UK ETS Authority commissioned CAG Consultants, in partnership with Winning Moves (WM), University College London (UCL) and Cambridge Econometrics, to deliver a 2-phase evaluation programme to provide evidence on:
- the effectiveness of the scheme’s implementation
- the early outcomes of the scheme
- its longer terms impacts
This first phase of the evaluation, covering process, outcomes and early impacts, was completed in December 2023. The report findings cover:
- transition from EU ETS to UK ETS
- effectiveness of UK ETS delivery
- operation of the UK ETS market and assessment of its performance
- early findings on emissions reduction activity
- early finding on carbon leakage
The annexes present the underlying evidence feeding into the phase 1 synthesis.
The second phase of the evaluation, covering a comprehensive assessment of the scheme’s long-term impacts, is expected to run from 2024 to 2026.