Allocating carbon emissions

I attended an interesting seminar a few days ago, where in passing the presenter mentioned that the current emissions trading scheme wasn’t resulting in particularly positive changes in behaviour because:

1. The companies don’t treat the money they could earn by using less than their quota, and selling the remainder, in the same way as they treat the cost of going over their quota. I get the impression the pressure to reduce emissions is therefore not great.
2. The quota is helpful in keeping out new entrants
3. The scheme can be circumvented by importing from outside the EU, despite that causing greater global emissions.

It reminded me of stories I’d heard about the fighting involved in allocating Kyoto quotas to countries, and then in turn within the EU and within countries in allocating quotas to companies.

I just wonder why bother? Why have a quota? We will probably need to get to zero net emissions by 2100. Zero is a much easier number to allocate. Just say that no one is allowed to be a net emitter. Any emitter must pay for someone else to absorb.

The reason for the quotas is, presumably, in order to smooth the shock of a sudden increase in the cost of emissions. This could be done more equitably by governments (the EU, or the UN) becoming an absorber of last resort, initially charging some very low price for absorbing CO2, and then gradually increasing the price until the free market takes over.