fields developed and less renewables coming on stream, and this will mean that when the green shoots of recovery appear and growth re-commences, it may be choked off as fuel supplies are quickly constrained. On the positive side, a shrinking global economy means also shrinking global emissions, providing thereby a breathing space to allow us to create the smart policies and technologies to break the link between economic growth and greenhouse gas emissions. And green tech industry and green collar jobs become mainstream, as governments look to public investment in the relatively labour intensive part of the green spectrum - insulation and energy efficiency and some forms of renewable energy to replace jobs in construction - and the Silicon valleys of the world transform themselves into the Green Tech valleys of the future. The UCD team takes as a starting point that climate change policies, including regulation, direct investment, and innovation, will work better and yield more efficient and environmentally effective outcomes if there is a price ‘out there’ that automatically rewards those who reduce emissions, and penalises those who do not. Europe has such a price created through the European Union Emissions Trading Scheme (EU ETS) where the price of a tonne of $ CO_{2} $ symbolises the fact that the earth’s capacity to absorb such gasses is scarce, and should be used parsimoniously. ‘Those that cannot remember the past are condemned to repeat it’. In regard to EU ETS, Europe has learnt the lessons of its past, and the scheme has been improved as it moves now into its third phase. We document this evolution, because there are insights for Japan as it considers whether and how to design and implement its own scheme. There are also lessons to be learnt from the modelling of the scheme before it was implemented, and the comparison of expectations from this work with actual outcomes. These comparisons will be of interest to Japanese modellers as they try to anticipate the impact and implications of JETS. Given the relative cheapness of coal, and its availability in China, the US and India, there is a conviction in Europe that it will not be possible to stabilise greenhouse gas emissions unless a technically and financially viable means of capturing and storing carbon (CCS) is developed. And policy has been designed to try to achieve this outcome. We document the basis for this conviction, the various technologies and issues around achieving CCS objectives, and the European policies that are being implemented to move this agenda forward.

There can be apprehensions that setting up, monitoring reporting and verifying, and of buying and selling allowances in an emissions trading scheme will cost so much that trading will be inhibited and there will be losses in efficiency and environmental effectiveness. There is also very little idea as to how firms on the ground respond to the existence of a price signal. We use Ireland as a laboratory to assess transactions costs and the response of firms in EU ETS to the existence of the price signal. The work on each chapter has been organised as follows: Preface, Executive Summary, the European Climate and Energy Package (Frank Convery), Ex ante and ex post analysis of EU ETS (Jurate Jaraite, with supervisory support from Corrado Di Maria), Carbon Capture and Storage (Barry Anderson, with supervisory support from Corrado Di Maria and Frank Convery), Transaction Costs (led by Jurate Jaraite, with Corrado Di Maria and Frank Convery), firm response to EU ETS (Barry Anderson, with Frank Convery and Corrado Di Maria)