National Audit Office report on The UK Emissions Trading Scheme published today

The National Audit Office (NAO) recently investigated the first year of operation of the UK Emissions Trading Scheme. The evaluation considered the value-for-money to the taxpayer of spending GBP 215 million to create an incentive for firms to voluntarily enter the scheme and evaluated the operation of the scheme against its set objectives. The study found that the Emissions Trading Scheme has brought about a reduction in emissions of greenhouse gases and that the Scheme has benefited the UK economy. It noted that, whilst some reductions were likely to have happened without the Scheme, most of the reductions were generated by the scheme. It concluded that the Scheme was a pioneering initiative with significant achievements and the Government has the opportunity to share the lessons learned from the innovative policy.Frontier (London) supported the NAO in its study by assessing the effectiveness of the auction used prior to the trading period to create incentives for participant firms to volunteer emission reductions and by assessing the first year of operation of the traded market for emission "allowances". The document can be found here.