The use of market-based instruments by a Member State, such as emission trading is already possible under the National Emission Ceilings Directive, but the directive could block the possibility for Member States to introduce an emission trading system that allows trade between installations in different Member States, in particular if the trade results in a situation of non-compliance of a Member State, while at the same time the compensating emission quantities will lower the national emission totals in other Member States. The possibility to allow for emission trading in joint control areas has been studied in some details as part of two Commission service contracts.
The conclusion of this study is that emission trading in so called joint control areas is possible without a significant loss of the protection of nature and human health, provided that the clustering of the Member States in there joint control areas is well chosen.
The second study concluded that at this stage no definitive conclusions could be made on expected cost-savings of this option while maintaining the same level of protection of ecosystems and human health. The study indicated that such trading regimes might cause local increases in concentrations of particulate matter unless trading is restricted to limited areas such as neighbouring countries. It was also noted that this spatial flexibility is implicitly allowed in large Member States indicating that allowing this flexibility also for limited groups of small Member States might create overall cost savings without jeopardizing the environmental objectives of the Thematic Strategy.