Indeed, the transaction costs would be much lower if we had compatible systems. However, because we have a system of tradable permits, we will have to decide at some point how many permits we will issue, even if we have intensity targets. One way or another, if we opt for a tradable permit market, and if the government decides to issue a limited number of permits, we will have a system which will be capped. If the cap is established based on complicated calculations involving intensity targets, this will obviously create uncertainty. If we begin to trade permits, we will have to decide how many permits will be allowed onto the market. So, even though this would be a complicated process, we would implicitly have decided on an emissions cap.
On November 26th, 2009. See this statement in context.