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Emission abatement: Untangling the impacts of the EU ETS and the economic crisis

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  • Bel, Germà
  • Joseph, Stephan

Abstract

In this study we use historical emission data from installations under the European Union Emissions Trading System (EU ETS) to evaluate the impact of this policy on greenhouse gas emissions during the first two trading phases (2005–2012). As such the analysis seeks to disentangle two causes of emission abatement: that attributable to the EU ETS and that attributable to the economic crisis that hit the EU in 2008/09. To do so, we use a dynamic panel data approach. Our results suggest that, by far, the biggest share of abatement was attributable to the effects of the economic crisis. This finding has serious implications for future policy adjustments affecting core elements of the EU ETS, including the distribution of EU emission allowances.

Suggested Citation

  • Bel, Germà & Joseph, Stephan, 2015. "Emission abatement: Untangling the impacts of the EU ETS and the economic crisis," Energy Economics, Elsevier, vol. 49(C), pages 531-539.
  • Handle: RePEc:eee:eneeco:v:49:y:2015:i:c:p:531-539
    DOI: 10.1016/j.eneco.2015.03.014
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:eneeco:v:75:y:2018:i:c:p:602-635 is not listed on IDEAS
    2. Gradus, Raymond H.J.M. & Nillesen, Paul H.L. & Dijkgraaf, Elbert & van Koppen, Rick J., 2017. "A Cost-effectiveness Analysis for Incineration or Recycling of Dutch Household Plastic Waste," Ecological Economics, Elsevier, vol. 135(C), pages 22-28.
    3. repec:kap:enreec:v:70:y:2018:i:1:d:10.1007_s10640-016-0108-1 is not listed on IDEAS
    4. repec:kap:compec:v:52:y:2018:i:1:d:10.1007_s10614-017-9664-x is not listed on IDEAS
    5. Fan, Ying & Jia, Jun-Jun & Wang, Xin & Xu, Jin-Hua, 2017. "What policy adjustments in the EU ETS truly affected the carbon prices?," Energy Policy, Elsevier, vol. 103(C), pages 145-164.
    6. Benedikt Downar & Jürgen Ernstberger & Hannes Rettenbacher & Sebastian Schwenen & Aleksandar Zaklan, 2019. "Fighting Climate Change with Disclosure? The Real Effects of Mandatory Greenhouse Gas Emission Disclosure," Discussion Papers of DIW Berlin 1795, DIW Berlin, German Institute for Economic Research.
    7. Xavier Timbeau & Pawel Wiejski, 2017. "EU ETS-broken beyond repair ? An analysis based on FASTER principles," Sciences Po publications 24, Sciences Po.
    8. repec:eee:rensus:v:82:y:2018:i:p3:p:3798-3807 is not listed on IDEAS
    9. Tol, Richard S.J., 2017. "The structure of the climate debate," Energy Policy, Elsevier, vol. 104(C), pages 431-438.
    10. Marit E. Klemetsen & Knut Einar Rosendahl & Anja Lund Jakobsen, 2016. "The impacts of the EU ETS on Norwegian plants' environmental and economic performance," Discussion Papers 833, Statistics Norway, Research Department.
    11. Bel, Germà & Joseph, Stephan, 2018. "Climate change mitigation and the role of technological change: Impact on selected headline targets of Europe's 2020 climate and energy package," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 3798-3807.
    12. Simon Quemin & Raphael Trotignon, 2018. "Competitive Permit Storage and Market Design: An Application to the EU-ETS," Working Papers 2018.19, FAERE - French Association of Environmental and Resource Economists.
    13. repec:eee:enepol:v:123:y:2018:i:c:p:127-135 is not listed on IDEAS
    14. repec:eee:ecmode:v:69:y:2018:i:c:p:114-126 is not listed on IDEAS
    15. Oskar Lecuyer & Philippe Quirion, 2016. "Interaction between CO2 emissions trading and renewable energy subsidies under uncertainty: feed-in tariffs as a safety net against over-allocation," Policy Papers 2016.03, FAERE - French Association of Environmental and Resource Economists.
    16. repec:oup:renvpo:v:12:y:2018:i:1:p:183-189. is not listed on IDEAS
    17. Germà Bel & Stephan Joseph, 2015. "“Certificate Oversupply in the European Union Emission Trading System and its Impact on Technological Change”," IREA Working Papers 201520, University of Barcelona, Research Institute of Applied Economics, revised Sep 2015.
    18. Raymond Gradus & Rick van Koppen & Elbert Dijkgraaf & Paul Nillesen, 2016. "A Cost-Effectiveness Analysis for Incineration or Recycling of Dutch Household Plastics," Tinbergen Institute Discussion Papers 16-039/VI, Tinbergen Institute.
    19. repec:eee:enepol:v:117:y:2018:i:c:p:434-444 is not listed on IDEAS
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    21. repec:gam:jeners:v:11:y:2018:i:4:p:706-:d:137313 is not listed on IDEAS
    22. Tan, Xue-Ping & Wang, Xin-Yu, 2017. "Dependence changes between the carbon price and its fundamentals: A quantile regression approach," Applied Energy, Elsevier, vol. 190(C), pages 306-325.

    More about this item

    Keywords

    Climate policy; Emissions Trading System; Panel data analysis; Verified emission data;

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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