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Auctioning of CO2 Emission Allowances in Phase 3 of the EU Emissions Trading Scheme

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  • Benz, Eva
  • Löschel, Andreas
  • Sturm, Bodo

Abstract

The “Climate action and renewable energy package” proposed by the European Commission in the beginning of 2008 suggests auctioning as basic principle for allocation for the upcoming third trading phase of the EU Emissions Trading Scheme that runs from 2013 to 2020. Overall, it is estimated that at least two third of the total quantity of allowances will be auctioned in 2013, to be increased to 100 % by 2020. In this paper, we emphasize the importance of a properly chosen auction design as the significantly higher auction share, compared to the past and current trading phase, is expected to yield a thin secondary market for CO2 allowances. We elaborate main criteria that a viable auction design is supposed to fulfil and propose a specific auction design for the third trading phase. The auction we recommend is a simultaneous dynamic uniform double auction. -- Die Europäische Kommission hat in ihrem „Klima- und Energiepaket“ vom Januar 2008 eine Weichenstellung für den europäischen Emissionshandel vorgeschlagen. Bislang wurden die Zertifikate an die betroffenen Unternehmen aus den energieintensiven Sektoren kostenfrei vergeben. Nach den Plänen der Kommission sollen Stromproduzenten ab 2013 alle benötigten Zertifikate ersteigern müssen. Unternehmen aus anderen energieintensiven Branchen sollen zunächst nur 20 % ersteigern, in 2020 dann 100 %. Da insgesamt mindestens zwei Drittel aller Zertifikate versteigert werden, ist zu erwarten, dass der freie Markt für Zertifikate ab 2013 deutlich dünner sein wird als dies bisher der Fall ist. Aus diesem Grund gewinnt das Design der Auktion an Bedeutung, denn vom Auktionspreis, der die Knappheit an Zertifikaten signalisieren soll, werden wichtige Investitionsentscheidungen in CO2-arme Technologien abhängen. Eventuelle Fehler im Auktionsdesign können, wenn die Zertifikate überwiegend versteigert werden, nicht mehr durch einen liquiden freien Markt „geheilt“ werden.

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Bibliographic Info

Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 08-081.

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Date of creation: 2008
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Handle: RePEc:zbw:zewdip:7423

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Keywords: climate policy; emissions trading; auction design;

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