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EU Emissions Trading – Allocation Patterns and Trade Flows


  • Claudia Kettner



Ever since 2005, the EU Emissions Trading Scheme (EU ETS) has been the core instrument of European climate policy. It covers industrial and energy facilities which produce about 40 percent of the EU's total greenhouse gas emissions and is the biggest implementation of a cap-and-trade scheme worldwide. An in-depth analysis of EU emissions trading from 2005 to 2011 is based on a database that comprises more than 10,000 installations in 25 EU member countries. The analysis found that 2008 was the only year in which a binding upper limit was specified for the emissions trading system. The other years had surplus certificates which were at times substantial and which were caused by a less than ambitious emission cap during the pilot phase (2005-2007) and a reduction in emissions in the Kyoto phase (2008-2012) consequent to the economic crisis and the resultant weak economy. During the first trading period, only a small share of the certificates issued throughout the EU was traded across borders. Similarly, certificates derived from the flexible mechanisms of the Kyoto Protocol (Certified Emission Reductions, Emission Reduction Units) are still of little importance.

Suggested Citation

  • Claudia Kettner, 2012. "EU Emissions Trading – Allocation Patterns and Trade Flows," WIFO Monatsberichte (monthly reports), WIFO, vol. 85(9), pages 737-750, September.
  • Handle: RePEc:wfo:monber:y:2012:i:9:p:737-750

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    References listed on IDEAS

    1. Alexandre Kossoy & Philippe Ambrosi, "undated". "State and Trends of the Carbon Market 2010," World Bank Other Operational Studies 13401, The World Bank.
    2. Ellerman,A. Denny & Buchner,Barbara K. & Carraro,Carlo (ed.), 2007. "Allocation in the European Emissions Trading Scheme," Cambridge Books, Cambridge University Press, number 9780521875684, December.
    3. Meghan McGuinness & Raphael Trotignon, 2007. "Technical Memorandum on Analysis of the EU ETS Using the Community Independent Transaction Log," Working Papers 0712, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
    4. Claudia Kettner & Angela Köppl & Stefan Schleicher, 2010. "The EU Emission Trading Scheme. Insights from the First Trading Years with a Focus on Price Volatility," WIFO Working Papers 368, WIFO.
    5. R. Trotignon & A. Denny Ellerman, 2008. "Compliance Behavior in THE EU-ETS: Cross Border Trading, Banking and Borrowing," Working Papers 0812, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
    6. repec:dau:papers:123456789/10174 is not listed on IDEAS
    7. Claudia Kettner & Angela Köppl & Stefan P. Schleicher & Gregor Thenius, 2008. "Stringency and distribution in the EU Emissions Trading Scheme: first evidence," Climate Policy, Taylor & Francis Journals, vol. 8(1), pages 41-61, January.
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