This paper analyses distributional effects between participants of the EU Emissions Trading System (EU ETS) during its first trading period. To this end, a selection model is formulated and applied to a dataset based on account information and transfer data from the EU Transaction Log (EUTL). Four different ways of adding carbon prices to the…
Tag: EU ETS
Should the EU ETS be Extended to Road Transport and Heating Fuels?
This paper considers the current proposal to extend the EU ETS to cover CO2 emissions from the combustion of heating and road transport fuels. We argue that increased coverage of the EU ETS, together with a binding cap consistent with a net zero trajectory, would provide an EU-wide quantity backstop ensuring that the EU’s cumulative…
EU ETS Phase 3 Benchmarks – Implications and Potential Flaws
In Phase 3 (2013-20) of the European Union Emissions Trading Scheme, the allocation methodology has shifted from grandfathering to a combination of auctioning and benchmark-based free allocation in the framework of Community-wide rules. Free allocation will apply mainly to non-electricity generators, and will decrease linearly throughout the phase with a view of ending free allocation…
Development and Application of Greenhouse Gas Performance Benchmarks in the European Union Emissions Trading Scheme
In the European Union Emissions Trading Scheme’s third trading period (2013-2020), the free allocation of emission allowances will be based on greenhouse gas performance benchmarks. This policy note describes how the revised rules were developed, how they will be applied in practice, and what they imply for operators of installations subject to the system. It…
Linking Emission Trading Schemes: A Short Note
In principle, linking emission trading schemes would favour the depletion of low-cost abatement opportunities that are geographically spread over the globe. However, this would only be possible if the price of the emission permits in the different schemes converge to one price. Using a simple model-free structure, the paper first assesses how a unilateral link…