Enforcing the European emissions trading system within the EU member states : A Procrustean bed?

The effectiveness and reliability of the EU ETS depends for a substantial part on the level of compliance in each of the 31 participating states. A lack of compliance in even one or just a few participating countries may harm the functioning of the ETS in the entire EU. So far, attention for compliance of the EU ETS has been mainly focused on harmonization of the MRV-process and on the role of the verifiers in the MRV-process. Little or no attention is paid to enforcement of the EU ETS by the competent authorities in the participating states. We have researched whether in the third phase the compliance mechanism of the EU ETS has sufficiently improved in terms of effectiveness with a specific focus on the role of competent enforcement agencies in the participating countries. From empirical research in a number of EU Member States, we conclude that the final, essential element of the compliance cycle, i.e., administrative and criminal enforcement by the domestic authorities in the Member States is not overall effective. In order to increase resilience and reliability of the EU’s central instrument to achieve future climate change targets, we suggest that more efforts should be undertaken to harmonize the practice of the national competent authorities responsible for the enforcement of the EU ETS.