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The EU Emission Trading Scheme. Sectoral Allocation Patterns and Factors Determining Emission Changes

Author

Listed:
  • Claudia Kettner
  • Daniela Kletzan-Slamanig

    (WIFO)

  • Angela Köppl

Abstract

The EU Emission Trading Scheme (EU ETS) that covers emitters from industry and energy supply representing 40 percent of the EU's greenhouse gas emissions is the biggest implementation of a cap-and-trade scheme worldwide. In this paper, we analyse sectoral allocation caps focusing on three emission intensive sectors ("power and heat", "cement and lime", "pulp and paper"), assess the development of emissions and discuss the main drivers for emissions in these sectors since the start of the EU ETS. Our analysis of allocation patterns shows that "power and heat" is the only sector permanently facing a stringent cap. The disaggregated analysis of the development of CO2 emissions also reveals pronounced sectoral disparities, which points at differences in the availability of emission abatement options. The data for cement and lime production show changes in CO2 intensity pointing at an increased import of clinker. For paper and pulp production and for power and heat generation improvements in emission intensities and to a lesser extent energy intensities can be observed, reflecting the role of fuel shifts in short-term emission reductions.

Suggested Citation

  • Claudia Kettner & Daniela Kletzan-Slamanig & Angela Köppl, 2013. "The EU Emission Trading Scheme. Sectoral Allocation Patterns and Factors Determining Emission Changes," WIFO Working Papers 444, WIFO.
    • Handle: RePEc:wfo:wpaper:y:2013:i:444
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    References listed on IDEAS

    as
    1. Ellerman,A. Denny & Buchner,Barbara K. & Carraro,Carlo (ed.), 2007. "Allocation in the European Emissions Trading Scheme," Cambridge Books, Cambridge University Press, number 9780521875684.
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    Cited by:

    1. Branger, Frédéric & Quirion, Philippe, 2015. "Reaping the carbon rent: Abatement and overallocation profits in the European cement industry, insights from an LMDI decomposition analysis," Energy Economics, Elsevier, vol. 47(C), pages 189-205.

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    Keywords

    EU Emission Trading Scheme; allocation caps; decomposition analysis;
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