The other damaging glut

Emissions-trading systems have suffered from an oversupply of permits. Regulators are trying to fix that and show the mechanisms can still work

As countries from Kazakhstan to Mexico weigh up the pros and cons of establishing carbon trading as part of their contributions to the Paris Agreement, the oldest markets are still striving to tackle their chronic problem: oversupply. The three main systems in operation, the EU's Emissions Trading System (EU ETS), the Regional Greenhouse Gas Initiative (RGGI) in the northeast US and California's state-wide system, all suffer from gluts of unused permits. This has depressed prices and allowed industrial emitters to buy their way to compliance instead of making changes to their energy-intensive processes. Critics say this proves carbon markets are ineffective and carbon taxes should replace in