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The UK’s Climate Change Programme introduced an Emissions Trading Scheme (ETS) for greenhouse gases. Firms in over 40 industrial sectors which have negotiated “Climate Change Agreements” setting quantitative energy efficiency targets can use the ETS to trade over-and under-compliance with these targets. In parallel, a limited number of firms have become major participants in the ETS as a result of an auction of subsidies for additional abatement commitments. The paper describes the UK arrangements and assesses the economic efficiency and environmental effectiveness of the ETS, drawing on evidence of participants’ behaviour both in the incentive auction, and in subsequent trading. [ABSTRACT FROM AUTHOR]

The article reports on British Prime Minister Gordon Brown's creation of a Department of Energy and Climate Change. The announcement was made on October 3, 2008 as part of a wider recognition of the government. The creation of the department was widely praised by environmentalists. The article reports on climate change and energy policy in Great Britain.