Carbon prices - work in progress, not panacea, for rich and poor

A pedestrian walks past power lines in east Sydney October 12, 2011. REUTERS/Daniel Munoz

BRUSSELS/LONDON (Reuters) - It was supposed to be the way the market would cut greenhouse gases by itself: governments selling companies permits-to-pollute, which they could trade among themselves. Over time, the number of permits would be reduced, and the cost to companies of failing to cut emissions would rise.

Yet, 10 years after the EU launched the world's biggest carbon trading scheme, the effectiveness of the concept is in question and climate activists are disenchanted or hostile.