ETCLIP – The Challenge of the European Carbon Market: Emission Trading, Carbon Leakage and Instruments to Stabilise the CO2 Price. The EU Emission Trading Scheme: Sectoral Allocation Patterns and the Effects of the Economic Crisis
AbstractThe European Emission Trading Scheme (EU ETS) is a key instrument in European climate policy and covers emitters from the energy and manufacturing sector. The ETS pilot phase (2005-2007) was characterised by an oversupply of emission allowances mainly due to the "generous" allocation of allowances by member countries. For the second trading phase (2008-2012) the European Commission aimed at increasing the stringency of the overall emission cap and took a more active role in approving member countries' National Allocation Plans. Due to the decline in economic activity and emissions in the course of the economic crisis, the cap, however, was only stringent in 2008 whereas 2009 and 2010 both showed a long position for EU total. Differences in national and sectoral caps are found for all years. In this paper, we analyse differences in allocation patterns, i.e., in the stringency of the cap and in the spread between installations, until 2010. We focus on general sectoral allocation patterns and perform an in-depth analysis for three emission intensive sectors: "power and heat", "cement and lime" and "pulp and paper". Furthermore, we discuss the impact of the economic crisis on the emissions of these sectors in detail.
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Bibliographic InfoPaper provided by WIFO in its series WIFO Working Papers with number 408.
Length: 30 pages
Date of creation: 09 Nov 2011
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-12-13 (All new papers)
- NEP-ENE-2011-12-13 (Energy Economics)
- NEP-ENV-2011-12-13 (Environmental Economics)
- NEP-EUR-2011-12-13 (Microeconomic European Issues)
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Environmental & Resource Economics,
European Association of Environmental and Resource Economists, vol. 48(1), pages 83-103, January.
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- Wilfried Rickels & Dennis Görlich & Gerrit Oberst, 2010. "Explaining European Emission Allowance Price Dynamics: Evidence from Phase II," Kiel Working Papers 1650, Kiel Institute for the World Economy.
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