The Emission Trading Scheme for green house gases is a key tool of European climate protection. Including the road transport sector might be a promising strategy to limit its CO2 emissions. This could be realized within a common market (trans-sectoral trading permitted) or separated markets (trans-sectoral trading not permitted). Starting from different assumptions on emission reduction objectives, the impact of both options is analyzed using a quantitative model. Although an emission trading scheme is ecologically effective regardless of the trading model, it turns out that CO2 emissions and emission allowance prices differ strongly between both design options due to sector specific price elasticities of allowance demand. (authors' abstract)

<p>International regulations target a global reduction of carbon dioxide (CO2) emissions through the allocation of national reduction targets and the definition of mechanisms to achieve these targets. One of these mechanisms is international emissions trading, these trading programs have been the targets of widespread criticism since they were introduced into the policy-making arena. The point of departure in this study has been that the trading raises questions about morality, since it implies signals, which legitimates pollution. The main purpose with this study has been to find out if emissions trading systems can be morally justified with the method of wide reflective equilibrium. From the study it was found that the moral intuition; it is wrong to pollute the environment, and perform activities, which legitimates pollution, finds support from the different theories within environmental ethics and Kantian ethics. But, it was also found that there are a number of background theories, such as neo-classical economic thinking, liberalism, and utilitarianism, that supports the notion of emissions trading. The paper argues that even though the concept of CO2-emissions trading raises moral questions it can be morally defended on the basis of rationality. When the theory about specification is applied to the concept of emissions trading it is possible to reach a situation were a wide reflective equilibrium is achieved.</p>

International regulations target a global reduction of carbon dioxide (CO2) emissions through the allocation of national reduction targets and the definition of mechanisms to achieve these targets. One of these mechanisms is international emissions trading, these trading programs have been the targets of widespread criticism since they were introduced into the policy-making arena. The point of departure in this study has been that the trading raises questions about morality, since it implies signals, which legitimates pollution. The main purpose with this study has been to find out if emissions trading systems can be morally justified with the method of wide reflective equilibrium. From the study it was found that the moral intuition; it is wrong to pollute the environment, and perform activities, which legitimates pollution, finds support from the different theories within environmental ethics and Kantian ethics. But, it was also found that there are a number of background theories, such as neo-classical economic thinking, liberalism, and utilitarianism, that supports the notion of emissions trading. The paper argues that even though the concept of CO2-emissions trading raises moral questions it can be morally defended on the basis of rationality. When the theory about specification is applied to the concept of emissions trading it is possible to reach a situation were a wide reflective equilibrium is achieved.