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Briefly on the Climate: The Coronavirus Crisis and its Effects on European Emissions Trading

Author

Listed:
  • Karen Pittel
  • Helena Cordt
  • Sandra Gschnaller
  • Mathias Mier
  • Valeriya Azarova

Abstract

The national shutdowns triggered by the coronavirus pandemic led to a collapse in economic activity in Europe. Among other things, greenhouse gas emissions in Europe fell significantly due to the shutdown of production plants and lower demand for electricity. This also affected the European Emissions Trading Scheme (EU ETS). Since companies temporarily require fewer CO2 certificates, the CO2 price fell sharply for a while. With the support of the EU REGEN model, it was simulated that the current savings in emissions will be of only limited help in meeting European climate targets, as only 140 million – in the event of a rapid recovery of economic activity – to 541 million – in the event of a severe and lasting recession – additional certificates are cancelled.

Suggested Citation

  • Karen Pittel & Helena Cordt & Sandra Gschnaller & Mathias Mier & Valeriya Azarova, 2020. "Briefly on the Climate: The Coronavirus Crisis and its Effects on European Emissions Trading," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 73(06), pages 67-71, June.
    • Handle: RePEc:ces:ifosdt:v:73:y:2020:i:06:p:67-71
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    References listed on IDEAS

    as
    1. Editorial, 2020. "Covid-19 and Climate Change," Journal, Review of Agrarian Studies, vol. 10(1), pages 5-6, January-J.
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    3. Florian Dorn & Clemens Fuest & Marcell Göttert & Carla Krolage & Stefan Lautenbacher & Robert Lehmann & Sebastian Link & Sascha Möhrle & Andreas Peichl & Magnus Reif & Stefan Sauer & Marc Stöckli & Kl, 2020. "The Economic Costs of the Coronavirus Shutdown for Selected European Countries: A Scenario Calculation," EconPol Policy Brief 25, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    4. Alex Schmitt, 2017. "Climate Notes: Emissions Trade – Familiar Problems, New Solutions?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 70(09), pages 48-50, May.
    5. Geoffrey J. Blanford & Christoph Weissbart, 2019. "A Framework for Modeling the Dynamics of Power Markets – The EU-REGEN Model," ifo Working Paper Series 307, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
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    Cited by:

    1. Henni, Sarah & Schäffer, Michael & Fischer, Peter & Weinhardt, Christof & Staudt, Philipp, 2023. "Bottom-up system modeling of battery storage requirements for integrated renewable energy systems," Applied Energy, Elsevier, vol. 333(C).

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    More about this item

    Keywords

    EU-Emissionshandel; EU-Klimapolitik; Treibhausgas-Emissionen; Epidemie;
    All these keywords.

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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