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Ways to improve the design of the EU emissions trading scheme: key issues and answers

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  • Zhang, ZhongXiang

Abstract

The Europe Union is about to lunch the world’s first greenhouse gas emissions trading scheme in history. This represents an enormous challenge because there is no previous experience with such an unprecedented scheme, and because its final outcome might shape the design of future environmental market-based policies as well as the political viability of future efforts towards emissions reductions. There are five basic issues that not only will shape the final design of the scheme but also might hinder the performance of such a scheme, if not effectively addressed. They include universal vs. reduced scope, member country vs. European-wide sector objectives and allocations, allocation methodology and base year choice, energy mix and national security, and incentives for technological innovation. This paper aims to address these key issues to help to shape the final design of the scheme in a positive manner.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 14668.

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Date of creation: Sep 2004
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Handle: RePEc:pra:mprapa:14668

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Keywords: EU emissions trading scheme; Allowance allocations; Carbon price; Energy mix; Technological innovation; Competitiveness concerns;

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  1. Manne, Alan & Richels, Richard, 2004. "US rejection of the Kyoto Protocol: the impact on compliance costs and CO2 emissions," Energy Policy, Elsevier, vol. 32(4), pages 447-454, March.
  2. ZhongXiang Zhang, 2003. "Open Trade with the U.S. without Compromising Canada’s Ability to Comply with its Kyoto Target," Working Papers 2003.68, Fondazione Eni Enrico Mattei.
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