The Distribution of European Union Allowances (EUAs): Windfall Profits, Free Allocation and Auctions
AbstractThe first half of the paper provides a brief overview of the European Union’s Emission Trading System (EU ETS), and discusses how emission allowances have been allocated during the first two phases of the trading scheme. I then discuss the effects of auctioning off more emission allowances during Phase III of the EU ETS. I conclude that such a change would reduce the windfall profits of the initial allowance holders, and provide additional revenues that participating governments could use to support a variety of policies, some of which I discuss.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 24242.
Date of creation: 2010
Date of revision:
environmental economics; emissions trading; European Union; windfall profits;
Find related papers by JEL classification:
- Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
- P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-08-14 (All new papers)
- NEP-ENE-2010-08-14 (Energy Economics)
- NEP-ENV-2010-08-14 (Environmental Economics)
- NEP-EUR-2010-08-14 (Microeconomic European Issues)
- NEP-REG-2010-08-14 (Regulation)
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.:
- Hepburn, C. & Grubb, M. & Neuhoff, K. & Matthes , F. & Tse, M., 2006. "Auctioning of EU ETS Phase II allowances: how and why?," Cambridge Working Papers in Economics 0644, Faculty of Economics, University of Cambridge.
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