ABSTRACT
This chapter revisits the crooked path of the European Union Emissions Trading System (EU ETS) from conception in 1998-2000 until 2020. Neoclassical economists limit political economy to the apology of donations of free permits. A political economy investigation faces an iceberg-like reality: 10% visible and 90% under the waterline. The EU ETS is called the flagship or cornerstone of EU’s climate policy. Some background on societal, energy and climate issues is helpful in understanding the context of the EU ETS. The growth in population was superseded by a faster growth in commercialized goods and services, globally measured by the addition of the countries’ Gross Domestic Products. Sustainable Development (SD) is a development that meets the needs of the present generations without compromising the ability of future generations to meet their own needs. The 1992 World Summit on Environment and Development in Rio de Janeiro did accept the first inroads on the Our Common Future-SD essence.
