Reflections—The Emerging Literature on Emissions Trading in Europe

In its first issue, in 2007, this journal devoted a three-article symposium to the European Union Emissions Trading Scheme (EU ETS). Why revisit this topic so soon? There are a few reasons. Since our profession’s beginning, the integration of environment and economy via markets has been a core objective, and the reason why many of us entered the field of environmental economics in the first place. Carbon emissions trading in Europe has finally lifted environment from the boiler room to the boardroom, and from ministries of environment to ministries of finance. For chief executives of many major corporations, the environment has become an omnipresent, if not always welcome, guest at their strategic tables. Airlines are to be included in the next phase of the EU ETS, which will run from 2013 to 2020. One of those in the industry whose attention has been caught by the carbon trading issue is Michael O’Leary, the chief executive of Ryanair, one of the lowest cost and most commercially successful airlines in the world. In a letter to the Irish Times, he expressed his view as follows (O’Leary 2008).