EU ETS Phase 3 benchmarks: Implications and potential flaws
AbstractIn its third Phase (2013-20), the European Union Emissions Trading Scheme allocation methodology is shifting from grandfathering to a combination of auctioning and benchmarking. Free allocation is now be devoted to non-electricity generators only (save exemption), and is linearly decreasing throughout the Phase with a view of no free allocation in 2027. Benchmark-based free allocation is meant to reward lowest CO2-intensive installations as opposed to grandfathering, which allocated allowances based on historical emissions levels. This policy note describes the concrete implications involved by this shift in allocation methodology, and addresses the potential flaws of benchmarking-based allocation, using data from French nstallations’ Phase 3 provisional free allocation.
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Bibliographic InfoPaper provided by Chaire Economie du Climat in its series Working Papers with number 1305.
Length: 18 pages
Date of creation: 2013
Date of revision:
EU ETS; Benchmarks; Preliminary amounts; Carbon leakage; Historical Activity Level;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-09-28 (All new papers)
- NEP-ENE-2013-09-28 (Energy Economics)
- NEP-ENV-2013-09-28 (Environmental Economics)
- NEP-EUR-2013-09-28 (Microeconomic European Issues)
- NEP-REG-2013-09-28 (Regulation)
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