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The Impact of the EU Emissions Trading System on CO2 Intensity in Electricity Generation

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Author Info
Widerberg, Anna () (Department of Economics, School of Business, Economics and Law, Göteborg University)
Wråke, Markus (Department of Economics, School of Business, Economics and Law, Göteborg University)

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Abstract

Prior to the launch of the EU Emissions Trading System (EU ETS) in 2005, the electricity sector was widely proclaimed to have more low-cost emission abatement opportunities than other sectors. If this were true, effects of the EU ETS on carbon dioxide (CO2) emissions would likely be visible in the electricity sector. Our study looks at the effect of the price of emission allowances (EUA) on CO2 emissions from Swedish electricity generation, using an econometric time series analysis for the period 2004–2008. We control for effects of other input prices and hydropower reservoir levels. Our results do not indicate any link between the price of EUA and the CO2 emissions of Swedish electricity production. A number of reasons may explain this result and we conclude that other determinants of fossil fuel use in Swedish electricity generation probably diminished the effects of the EU ETS.

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File URL: http://hdl.handle.net/2077/20392
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Publisher Info
Paper provided by Göteborg University, Department of Economics in its series Working Papers in Economics with number 361.

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Length: 22 pages
Date of creation: 09 Jun 2009
Date of revision:
Handle: RePEc:hhs:gunwpe:0361

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Postal: Department of Economics, School of Business, Economics and Law, Göteborg University Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
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Related research
Keywords: Emissions trading; carbon dioxide; climate change; electricity; carbon intensity;

Find related papers by JEL classification:
C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior
D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters

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This page was last updated on 2009-12-4.

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