Cap and trade: The EU Emissions Trading System (ETS) is the world’s first cap and trade scheme for emissions, and covers around 45 % of the EU’s greenhouse gas emissions. The ETS has been criticised for inefficiency and even subsidising polluters at the taxpayers’ expense, while defenders argue that it cuts emissions where it costs least to do so. What steps should the EU take in order to improve the ETS and ensure CO2 emissions are reduced in the most cost-efficient way?