The European Union's (EU) emissions trading scheme is the most significant step yet taken by policymakers to tackle climate change, a review of the initiative has concluded.
Environmental economists assessing the impact of the scheme over the first two years of a three-year trial period also predict that the programme designed to help cut carbon dioxide emissions in Europe will be central to future global climate talks.
Under the scheme the amount of carbon dioxide that individual businesses can emit is capped, with those who exceed their allocation required to purchase allowances from those who emit less than their quota in order to cover their extra emissions.
In a series of articles published today in the first issue of the Review of Environmental Economics and Policy journal, academics from a number of countries say that while there is evidence that some EU member states and industrial sectors have been granted over-generous allowances, the main objective of limiting carbon emissions has been achieved under the scheme.
A review of emissions data for 2005, the first year of the emissions trading scheme, reveals that allowances exceeded carbon dioxide emissions by around 80 million tonnes across the EU.
Emissions exceeded allowances in just six of the then 25 member states, including the UK.
But despite the apparent success of the scheme, those reviewing it stress that the EU accounts for just 20 per cent of global greenhouse gas emissions and say that such an initiative is needed across the world if climate change is to be tackled effectively.
However they warn that the lack of a body equivalent to the European Commission at a global level would be a stumbling block in the adoption of a worldwide emissions trading scheme.
Earlier this month the UK government released data showing that carbon emissions for British businesses participating in the scheme increased by 3.6 per cent in 2006 - the second year of the initiative.
A total of 251.1 million tonnes of carbon dioxide were emitted by the country's firms last year. An increase in carbon dioxide emissions from the UK's power sector has been held responsible for the rise, which was blamed on the greater use of coal-fired facilities to generate electricity in the wake of higher gas prices.
Nonetheless climate change and environment minister Ian Pearson stressed that businesses had complied with the requirements of the emissions trading scheme 100 per cent in an "outstanding" effort to tackle climate change.