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The Failure of Sulphur Trading in the UK

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  • Steve Sorrell

    (SPRU University of Sussex)

Abstract

The use of emissions trading for the control of sulphur 2 emissions was first proposed by the UK government in 1992 as an attractive means to overcome problems with the existing regulatory framework (DoE, 1992). Despite repeated pronouncements in favour of ‘sulphur quota switching’ (as it was termed) and a strong commitment to economic instruments and deregulation, the idea was eventually dropped in 1996. This chapter explains why this occurred and draws some general lessons for the implementation of emissions trading in Europe. These lessons are particularly relevant to carbon trading after Kyoto. The various European regulations on sulphur emissions and the way these have been implemented within the UK. An account of the radical changes in UK energy markets over the last decade and the impact of these on sulphur emissions follows. The evolution of the debate on sulphur quota switching is then described, showing how the proposals faced a series of obstacles that ultimately proved insurmountable. Six reasons are proposed for the failure of the scheme, namely: independent developments in energy markets; a conflict of regulatory principles; a conflict of regulatory culture; a conflict over quota allocation; persistent regulatory uncertainty; and inadequate political support. The wider implications of these lessons are then considered.

Suggested Citation

  • Steve Sorrell, 1999. "The Failure of Sulphur Trading in the UK," Energy & Environment, , vol. 10(6), pages 639-670, November.
    • Handle: RePEc:sae:engenv:v:10:y:1999:i:6:p:639-670
    DOI: 10.1260/0958305991499829
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    References listed on IDEAS

    as
    1. Pearce, David & Brisson, Inger, 1993. "BATNEEC: The Economics of Technology-Based Environmental Standards with a UK Case Illustration," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 9(4), pages 24-40, Winter.
    2. Stern, Jonathan P., 1997. "The British Gas market 10 years after privatisation: a model or a warning for the rest of Europe?," Energy Policy, Elsevier, vol. 25(4), pages 387-392, March.
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