In the European Union, neither the cap & trade scheme nor the carbon taxes seem to have led to measurable reductions in greenhouse gas emissions.
In 2005, the Kyoto Protocol went into effect. The EU had 15 member nations in 2004, and it formed a system for trading carbon allowances. A carbon tax had been imposed by the Scandinavian nations since the 1990s. These two measures were part of the EU’s efforts to reduce carbon emissions. When compared to its level of greenhouse gas emissions in 1990, the EU had committed to reduce its emissions by 8%.
Martin Freedman, from the Towson University in USA, and his colleagues have conducted a study on the disclosures made by certain EU firms about their carbon emissions. They studied the period from 2005 to 2007. They found that the measures to achieve the Kyoto goals did not seem to have had a significant impact. Further, they were not able to conclude whether the initiatives had significant changes in the EU industry.
Based on the data examined for the period, the EU may not meet its committed target within the time period. Further analysis and data may be affected by weather patterns, and the global recession. The EU may not be able to fulfill its obligations towards reducing carbon emissions as part of the Kyoto Protocol’s first phase.
The scientists have reported their findings in the International Journal of Critical Accounting.
Source: http://www.inderscience.com/