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The article discusses policy developments in response to climate change, and the potential impacts of these developments on the chemical industry. In the U.S., presidential candidates Barack Obama and John McCain endorse a cap oil greenhouse gas emissions (GHGs). The United Nations (UN) will seek to finalize details on an international climate treaty in Copenhagen in December 2009, and European regulators are negotiating the third phase of the European Union's (EU) GHG Emission Trading System (ETS) to be voted on this fall.

The article offers information on the efforts made by the manufacturers' organization Engineering Employers' Federation (EEF) regarding the reformation of the European Union (EU) emissions trading scheme. It discusses the agreement of the European Council on an energy and climate change framework to guide the EU. It presents the views of Richard Warren regarding the reduction in the carbon allowances given to manufacturers.

The article discusses the author's insights on the measures outlined by the European Commission (EC) that would commit the European Union to reducing emission across the bloc by 40% by 2030. He suggests that the Commission should have aimed much higher. The author also relates that the Commission is proposing to establish a market stability reserve that would allow for the automatic adjustment of the number of allowances traded to alleviate problems of emission policy.