MPs have asked the government to provide evidence that the EU Emissions Trading Scheme (EU ETS) is helping cut the UK's greenhouse gas emissions.
The Environmental Audit Committee has sought reassurances that the reduction in CO2 emissions are a result of the EU ETS and not "merely coincidental".
It said carbon trading schemes were too complex and that greater transparency was needed to assess their success.
The EU ETS is the main tool for European governments to cut emissions.
Phase I of the EU ETS came into force in January 2005 and will run until the end of 2007....MORE