This is how Bradford Plummer of The New Republic characterizes the Monday article in WaPo about Europe's cap-and-trade system:
The sheer complexity of the regime has, among other things, allowed countries to cheat in order to protect their home industries. The prognosis isn't exactly terminal--Europe's still working to iron out the wrinkles, and U.S. policymakers are trying to learn from their mistakes--but it's clear that most carbon-trading programs will inevitably allow for a certain amount of monkey business.
However, the article notes some pretty huge wrinkles, including a 25% jump in electricity prices for German homeowners. Then there are the other effects it is having:
Consider the plight of Kollo Holding's factory in the Netherlands, which makes silicon carbide, a material used as an industrial abrasive and lining for high-temperature furnaces and kilns. Its managers like to think of their plant as an ecological standout: They use waste gases to generate energy and have installed the latest pollution-control equipment. But Europe's program has driven electricity prices so high that the facility routinely shuts down for part of the day to save money on power. Although demand for its products is strong, the plant has laid off 40 of its 130 employees and trimmed production. Two customers have turned to cheaper imports from China, which is not covered by Europe's costly regulations.
That might not be "exactly terminal" for cap-and-trade, but it is pretty darn close.