They will invest in additional abatement wherever possible, thus creating a positive dynamic effect towards less pollution per unit of output, even though the absolute levels of pollution will remain fixed. From the former it takes the pricing of all units of emissions, from the latter it takes the idea of creating markets through the allocation of property rights. Last but not least, from the neo-Coasean approach it takes the idea that government’s role is primarily to reduce transaction costs in order to allow for new and more efficient forms of internalisation. Switching from a free allocation of quotas consistent with historical use rights to an allocation by auction has increased the need to pay attention to the plight of historic C02 emitters, which previously had been able to cushion the choc.