Fabien Roques, professor at University Paris Dauphine and senior vice president at Compass Lexecon, describes the European Union Emission Trading Scheme and its evolution since its inception in 2005 (GHG covered, countries and sectors involved, prices, etc.). The significant oversupply emerged since 2009-10 led to a reform of the scheme, first with the introduction of back-loading and then with the establishment of a market stability reserve.
