Emissions trading schemes with updated baseline emissions may reduce firms' incentives to cut emissions at a given price. However, these schemes can be cost-effective if the system is closed and rules are the same for all firms. But if abatement costs rise too quickly, the cost-effective solution may not work. Introducing a price cap or banking/borrowing changes the abatement profile. With updated emissions, the quota price will likely be much higher than abatement costs, potentially misleading policymakers and investors. Auctioning a significant portion of allowances could help keep prices closer to actual costs.