At present, around 45 per cent of EU CO2 emissions are covered by the EU ETS (Box 11.2). The success of European (and perhaps global) climate policy for the foreseeable future will largely depend upon how this scheme evolves, including in particular the stringency of the overall cap and the mechanisms chosen for allowance allocation. The EU ETS is expanding over time to cover more sectors and GHGs, as well as establishing links with trading schemes in other countries. It has already become the centrepiece of the global carbon market, with EU allowance trading amounting to 2061 million tonnes of carbon dioxide (MtCO2) in 2007. It accounted for 69 per cent of global carbon transactions by volume in 2007 and 78 per cent by value (US$51 billion) (IETA, 2008). Most of the remaining carbon transactions were for 'certified emission reductions' from the CDM (791 MtCO2 and US $12.8 billion in 2007) and around two-thirds of these were purchased by participants in the EU ETS.
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