IDEAS home Printed from https://ideas.repec.org/p/ris/fcnwpa/2023_009.html
   My bibliography  Save this paper

Tradable Performance Standards for a Greener Automobile Sector: An Economists’ Appraisal of the German Greenhouse Gas Mitigation Quota

Author

Listed:
  • Liepold, Constanze

    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

  • Fabianek, Paul

    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

  • Madlener, Reinhard

    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

Abstract

The Greenhouse Gas (GHG) Mitigation Quota is a unique instrument in Europe that redistributes money from high emission to low emission fuel markets, while forcing fuel distributors to reduce the average emissions of their fuels. This paper presents the design of the German 2022 GHG Quota, places it in the context of environmental policy instruments, and examines its impact on the affected fuel markets in relation to other environmental policy instruments. We aim to identify the strengths and weaknesses of the GHG Quota Trading as an alternative to allowance trading and carbon taxes, deliver results that can be applied in industry and policy making, and provide a basis for further research. Field research was conducted in the form of expert interviews. Furthermore, intermediaries and brokers were contacted via email and asked for transaction data. In addition, a qualitative literature review was conducted and publications of responsible authorities as well as relevant legal texts, were used to gather information. We find that the GHG Quota Trading overlaps with the instruments emission standards and emission trading scheme and therefore falls under the category of tradable performance standards. However, it also contains aspects of a subsidy and interacts directly or indirectly with several different markets

Suggested Citation

  • Liepold, Constanze & Fabianek, Paul & Madlener, Reinhard, 2023. "Tradable Performance Standards for a Greener Automobile Sector: An Economists’ Appraisal of the German Greenhouse Gas Mitigation Quota," FCN Working Papers 9/2023, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    • Handle: RePEc:ris:fcnwpa:2023_009
    as

    Download full text from publisher

    File URL: https://www.fcn.eonerc.rwth-aachen.de/global/show_document.asp?id=aaaaaaaacdvjymn
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kathleen Meisel & Markus Millinger & Karin Naumann & Franziska Müller-Langer & Stefan Majer & Daniela Thrän, 2020. "Future Renewable Fuel Mixes in Transport in Germany under RED II and Climate Protection Targets," Energies, MDPI, vol. 13(7), pages 1-18, April.
    2. Burtraw, Dallas & Fraas, Arthur G. & Richardson, Nathan, 2012. "Tradable Standards for Clean Air Act Carbon Policy," RFF Working Paper Series dp-12-05, Resources for the Future.
    3. Nelson, Tim & Reid, Cameron & McNeill, Judith, 2015. "Energy-only markets and renewable energy targets: Complementary policy or policy collision?," Economic Analysis and Policy, Elsevier, vol. 46(C), pages 25-42.
    4. Liepold, Constanze & Fabianek, Paul & Madlener, Reinhard, 2023. "A Critical Evaluation of the 2022 Greenhouse Gas Mitigation Quota in Germany from an Environmental Economics and Policy Perspective," FCN Working Papers 10/2023, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Casas Ferrús, M. Nieves & Ruhnau, Oliver & Madlener, Reinhard, 2023. "Portfolio Effects in Green Hydrogen Production Under Temporal Matching Requirements," FCN Working Papers 18/2023, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    2. Liepold, Constanze & Fabianek, Paul & Madlener, Reinhard, 2023. "A Multi-Criteria Assessment Framework for Direct Load Control in Residential Buildings from an Occupants’ Perspective," FCN Working Papers 15/2023, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Böhringer, Christoph & Garcia-Muros, Xaquin & Gonzalez-Eguino, Mikel & Rey, Luis, 2017. "US climate policy: A critical assessment of intensity standards," Energy Economics, Elsevier, vol. 68(S1), pages 125-135.
    2. Nelson, Tim & Pascoe, Owen & Calais, Prabpreet & Mitchell, Lily & McNeill, Judith, 2019. "Efficient integration of climate and energy policy in Australia’s National Electricity Market," Economic Analysis and Policy, Elsevier, vol. 64(C), pages 178-193.
    3. Millinger, M. & Reichenberg, L. & Hedenus, F. & Berndes, G. & Zeyen, E. & Brown, T., 2022. "Are biofuel mandates cost-effective? - An analysis of transport fuels and biomass usage to achieve emissions targets in the European energy system," Applied Energy, Elsevier, vol. 326(C).
    4. Simshauser, P. & Gilmore, J., 2020. "Is the NEM broken? Policy discontinuity and the 2017-2020 investment megacycle," Cambridge Working Papers in Economics 2048, Faculty of Economics, University of Cambridge.
    5. Simshauser, Paul, 2019. "Missing money, missing policy and Resource Adequacy in Australia's National Electricity Market," Utilities Policy, Elsevier, vol. 60(C), pages 1-1.
    6. Yang, Mian & Hong, Yili & Yang, Fuxia, 2022. "The effects of Mandatory Energy Efficiency Policy on resource allocation efficiency: Evidence from Chinese industrial sector," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 513-524.
    7. Keyu Bao & Rushikesh Padsala & Volker Coors & Daniela Thrän & Bastian Schröter, 2020. "A Method for Assessing Regional Bioenergy Potentials Based on GIS Data and a Dynamic Yield Simulation Model," Energies, MDPI, vol. 13(24), pages 1-24, December.
    8. Simshauser, Paul, 2021. "Renewable Energy Zones in Australia's National Electricity Market," Energy Economics, Elsevier, vol. 101(C).
    9. Yasir Alsaedi & Gurudeo Anand Tularam & Victor Wong, 2021. "Impact of the Nature of Energy Management and Responses to Policies Regarding Solar and Wind Pricing: A Qualitative Study of the Australian Electricity Markets," International Journal of Energy Economics and Policy, Econjournals, vol. 11(3), pages 191-205.
    10. Lawrence H. Goulder & Marc A. C. Hafstead & Roberton C. Williams III, 2016. "General Equilibrium Impacts of a Federal Clean Energy Standard," American Economic Journal: Economic Policy, American Economic Association, vol. 8(2), pages 186-218, May.
    11. Burtraw, Dallas & Woerman, Matt, 2013. "Technology Flexibility and Stringency for Greenhouse Gas Regulations," RFF Working Paper Series dp-13-24, Resources for the Future.
    12. Gohdes, Nicholas & Simshauser, Paul & Wilson, Clevo, 2023. "Renewable investments, hybridised markets and the energy crisis: Optimising the CfD-merchant revenue mix," Energy Economics, Elsevier, vol. 125(C).
    13. Simshauser, Paul, 2018. "Garbage can theory and Australia's National Electricity Market: Decarbonisation in a hostile policy environment," Energy Policy, Elsevier, vol. 120(C), pages 697-713.
    14. Rabindra Nepal & Tooraj Jamasb & Anupama Sen & Lawrence Cram, 2017. "Small Systems, Big Targets: Power Sector Reforms and Renewable Energy Development in Small Electricity Systems," Working Papers EPRG 1709, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    15. Li, Xiao-Lin & Li, Jingya & Wang, Jia & Si, Deng-Kui, 2021. "Trade policy uncertainty, political connection and government subsidy: Evidence from Chinese energy firms," Energy Economics, Elsevier, vol. 99(C).
    16. Joseph E. Aldy & William A. Pizer, 2015. "The Competitiveness Impacts of Climate Change Mitigation Policies," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 2(4), pages 565-595.
    17. Yeh, Sonia & Burtraw, Dallas & Sterner, Thomas & Greene, David, 2021. "Tradable performance standards in the transportation sector," Energy Economics, Elsevier, vol. 102(C).
    18. Tim Nelson & Stephanie Bashir & Eleanor McCracken-Hewson & Michael Pierce, 2017. "The Changing Nature of the Australian Electricity Industry," Economic Papers, The Economic Society of Australia, vol. 36(2), pages 104-120, June.
    19. Hung Do & Rabindra Nepal & Russell Smyth, 2020. "Interconnectedness in the Australian National Electricity Market: A Higher‐Moment Analysis," The Economic Record, The Economic Society of Australia, vol. 96(315), pages 450-469, December.
    20. Rai, Alan & Nunn, Oliver, 2020. "On the impact of increasing penetration of variable renewables on electricity spot price extremes in Australia," Economic Analysis and Policy, Elsevier, vol. 67(C), pages 67-86.

    More about this item

    Keywords

    GHG Quota; environmental policy instrument; poolers;
    All these keywords.

    JEL classification:

    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists
    • B55 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Social Economics

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:fcnwpa:2023_009. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Hendrik Schmitz (email available below). General contact details of provider: https://edirc.repec.org/data/fceonde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.