tiations. The Europeans also believed that the system was too complicated to implement within the specified time scale, and that marketable permits would be viewed as a 'right to pollute' and as 'trading in indulgences' (Grubb et al. 1999, p.92). Washington successfully used emissions trading to hold the negotiations hostage, threatening to withdraw from Kyoto if it was not included (Braun 2009, p.472). Although Kyoto was signed on December 11, 1997, the European negotiating team felt that they had failed to achieve their goals and quickly moved on to other tasks. Six months later, new leadership at the Commission finally began to embrace emissions trading. In delightful irony, it took the failed attempt to fight against emissions trading for the Commission to begin to realise its potential.
Although academic discussion of emissions trading had been heating up for several decades, it was not until the 2000 publication of the "Green Paper on GHG Emissions Trading" by the European Commission that the subject was seriously considered as a key part of European climate policy (Ellerman & Buchner 2007, p.68). In another dose of irony, it was not until 2001, when newly-appointed President George W. Bush unexpectedly pulled the United States out of the Kyoto Protocol, that real forward momentum began to occur on emissions trading in Europe. This international negotiations crisis, combined with the failure at the 6th Conference of the Parties (Braun 2009, p.472), "united Europe and triggered further interest in the establishment of an EU-wide market in GHG permits" (Zapfel & Vainio 2002, p.12). It was around this time that the draft EU ETS proposal was submitted for consideration (Convery et al. 2008, p.7-8). Before the EU ETS plan could be finalised and implemented, more experimentation and experience was required. That being said, there are a few programs that are certainly worth mentioning in relation to the origins of the EU ETS. They provided fundamental experience to EU policymakers, helped make emissions trading a more familiar concept, and in some ways shaped the EU ETS into what it is today.
The first program is the UK Emissions Trading Scheme (UK ETS), launched in April 2002. The UK ETS had an initial lifespan of 5 years and was closed to new entrants in 2009. Unlike the EU ETS, the UK ETS regulates the six different types of greenhouse gases (GHGs) outlined in the Kyoto Protocol. It provides flexibility to individual firms, with the intention of minimising the costs and encouraging participation. Furthermore, it quite blatantly aimed to appoint London as the central financial market for the trading of environmental permits (Smith & Swierzbinski 2007, p.135). Although the UK ETS was the first in Europe to cover multiple industries, it was not the first emissions trading scheme on the continent.
The first cap-and-trade scheme in Europe was launched in Denmark. In March of 1999, the Folketing (Danish Parliament) signed into law a major Electricity Reform. In addition to several changes to the overall organisation of the industry, tradable CO2 emission allowances were introduced for the 2000-2003 period (Pederson 2001, p.224). This program differed from the EU ETS in that it was limited to the electricity-generating sector; yet it was the first in the world to specifically target CO2, emissions, and was an important stepping stone in the development of policies in the EU ETS. The final emissions trading scheme
