Intra-union flexibility of non-ETS emission reduction obligations in the European Union
AbstractThe EU proposal on greenhouse gas emission reduction has 28 targets for 2020: an EU-wide one for CO2 emissions covered by the European Trading System (ETS), and one target for non-ETS emissions per Member State. Implementation is more expensive than needed. I consider three alternative proposals to reduce costs. In the Irish proposal, Member States can purchase ETS permits to offset excess non-ETS emissions. In the Polish proposal, Member States can sell excess non-ETS emissions in the ETS. In the Swedish proposal, Member States can trade their non-ETS allocations. I compare these alternatives to the default policy (no flexibility outside the ETS) and the cost-effective solution (full flexibility). I calibrate a simple model to the results of the EU impact assessment, which did not disclose all details and made odd assumptions. The non-ETS allocation exceeds the projected emissions for three Member States. The alternative flexibility mechanisms would be used to only a limited extent, but would cut the costs of meeting the target. The Swedish and Polish proposals come closest to the cost-effective solution because of the hot air. The Irish proposal performs best if there are negative surprises in either abatement costs or emissions. The Swedish proposal will become policy.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Energy Policy.
Volume (Year): 37 (2009)
Issue (Month): 5 (May)
Contact details of provider:
Web page: http://www.elsevier.com/locate/enpol
Climate change Emissions trade European Union;
Other versions of this item:
- Tol, Richard S. J., 2008. "Intra-Union Flexibility of Non-ETS Emission Reduction Obligations in the European Union," Papers WP256, Economic and Social Research Institute (ESRI).
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Capros, Pantelis & Mantzos, Leonidas & Parousos, Leonidas & Tasios, Nikolaos & Klaassen, Ger & Van Ierland, Tom, 2011. "Analysis of the EU policy package on climate change and renewables," Energy Policy, Elsevier, vol. 39(3), pages 1476-1485, March.
- Montgomery, W. David, 1972. "Markets in licenses and efficient pollution control programs," Journal of Economic Theory, Elsevier, vol. 5(3), pages 395-418, December.
- Gernot Klepper & Sonja Peterson, 2005.
"Emissions Trading, CDM, JI, and More – The Climate Strategy of the EU,"
2005.55, Fondazione Eni Enrico Mattei.
- Gernot Klepper & Sonja Peterson, 2006. "Emissions Trading, CDM, JI, and More: The Climate Strategy of the EU," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 1-26.
- Klepper, Gernot & Peterson, Sonja, 2006. "Emissions trading, CDM, JI, and more : the climate strategy of the EU," Open Access Publications from Kiel Institute for the World Economy 3814, Kiel Institute for the World Economy (IfW).
- Richard S.J. Tol, 2005.
"Europe’S Long Term Climate Target: A Critical Evaluation,"
FNU-92, Research unit Sustainability and Global Change, Hamburg University, revised Sep 2005.
- Tol, Richard S.J., 2007. "Europe's long-term climate target: A critical evaluation," Energy Policy, Elsevier, vol. 35(1), pages 424-432, January.
- Manne, Alan & Richels, Richard, 1996. "The Berlin Mandate: The costs of meeting post-2000 targets and timetables," Energy Policy, Elsevier, vol. 24(3), pages 205-210, March.
- Katrin Rehdanz & Richard S.J. Tol & Patrick Wetzel, 2005.
"Ocean Carbon Sinks And International Climate Policy,"
FNU-60, Research unit Sustainability and Global Change, Hamburg University, revised Feb 2005.
- Rehdanz, Katrin & Tol, Richard S.J. & Wetzel, Patrick, 2006. "Ocean carbon sinks and international climate policy," Energy Policy, Elsevier, vol. 34(18), pages 3516-3526, December.
- Pizer, William A., 2002. "Combining price and quantity controls to mitigate global climate change," Journal of Public Economics, Elsevier, vol. 85(3), pages 409-434, September.
- John P. Weyant, Francisco C. de la Chesnaye, and Geoff J. Blanford, 2006. "Overview of EMF-21: Multigas Mitigation and Climate Policy," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 1-32.
- Christoph Böhringer & Henrike Koschel & Ulf Moslener, 2008. "Efficiency losses from overlapping regulation of EU carbon emissions," Journal of Regulatory Economics, Springer, vol. 33(3), pages 299-317, June.
- Bjorn Carlen, 2003. "Market Power in International Carbon Emissions Trading: A Laboratory Test," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 1-26.
- Böhringer, Christoph & Hoffmann, Tim & de Lara Peñate, Casiano Manrique, 2005. "The Efficiency Costs of Separating Carbon Markets Under the EU Emissions Trading Scheme: A Quantitative Assessment for Germany," ZEW Discussion Papers 05-06, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Bohringer, Christoph & Hoffmann, Tim & Manrique-de-Lara-Penate, Casiano, 2006. "The efficiency costs of separating carbon markets under the EU emissions trading scheme: A quantitative assessment for Germany," Energy Economics, Elsevier, vol. 28(1), pages 44-61, January.
- Kruger, Joseph & Oates, Wallace E. & Pizer, William A., 2007. "Decentralization in the EU Emissions Trading Scheme and Lessons for Global Policy," Discussion Papers dp-07-02, Resources For the Future.
- De Cara, Stéphane & Jayet, Pierre-Alain, 2011. "Marginal abatement costs of greenhouse gas emissions from European agriculture, cost effectiveness, and the EU non-ETS burden sharing agreement," Ecological Economics, Elsevier, vol. 70(9), pages 1680-1690, July.
- Legge, Thomas & Scott, Susan, 2009. "Policy Options to Reduce Ireland's Greenhouse Gas Emissions," Research Series, Economic and Social Research Institute (ESRI), number RS9.
- Harmsen, Robert & Eichhammer, Wolfgang & Wesselink, Bart, 2011. "Imbalance in Europe's Effort Sharing Decision: Scope for strengthening incentives for energy savings in the non-ETS sectors," Energy Policy, Elsevier, vol. 39(10), pages 6636-6649, October.
- Robaina Alves, Margarita & Rodríguez, Miguel & Roseta-Palma, Catarina, 2011.
"Sectoral and regional impacts of the European carbon market in Portugal,"
Elsevier, vol. 39(5), pages 2528-2541, May.
- Margarita Robaina Alves & Miguel Rodríguez & Catarina Roseta-Palma, 2010. "Sectoral and regional impacts of the European Carbon Market in Portugal," GEE Papers 0021, Gabinete de Estratégia e Estudos, Ministério da Economia e da Inovação, revised Jul 2010.
- Legge, Thomas & Scott, Susan, 2009. "Policy Options to Reduce Ireland's GHG Emissions [Instrument choice: the pros and cons of alternative policy instruments]," Papers WP284, Economic and Social Research Institute (ESRI).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wendy Shamier).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.