The European Union has styled itself a global leader in climate action. In so doing, it presents itself as responding to science and public concern and its historic responsibilities. In terms of its means of response, the European Union’s emissions trading scheme (EU ETS) has been the primary instrument. A rational response to liberal economic theory, the EU ETS is often trumpeted as a cost-effective success story internally and as a model to be adopted externally. This optimistic narrative is challenged herein.