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Extending the EU Commission’s Proposal for a Reform of the EU Emissions Trading System


  • Schleicher, Stefan P.
  • Köppl, Angela
  • Zeitlberger, Alexander


Pursuing an evidence based approach we summarize the key elements of the European Commission’s proposal of July 2015 for a reform of the EU Emissions Trading System and offer facts about the current state of EU ETS that underline the needs for such a reform. We supply key data for understanding the current state of EU ETS and report in particular the share of freely allocated allowances in emissions for the various sectors since the start of EU ETS in 2005. This is the most relevant parameter for evaluating the stringency and cost impacts of the EU ETS on sectors and installations. We provide propositions for enhancing the allocation procedure of both free and auctioned allowances, the fundamental element in the cap and trade design of this system. We link this procedure closely to the relevant suggestions of the Commission proposal and offer extensions that can make in particular the allocation of free allowances more targeted and effective. We indicate how the impacts of free allowances can be calculated both for sectors and installations and conclude that these reform steps could reduce the administrative burden of the system.

Suggested Citation

  • Schleicher, Stefan P. & Köppl, Angela & Zeitlberger, Alexander, 2016. "Extending the EU Commission’s Proposal for a Reform of the EU Emissions Trading System," EIA: Climate Change: Economic Impacts and Adaptation 234308, Fondazione Eni Enrico Mattei (FEEM).
  • Handle: RePEc:ags:feemei:234308
    DOI: 10.22004/ag.econ.234308

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    Cited by:

    1. Karl Aiginger & Marcus Scheiblecker, 2016. "Österreich 2025 – Eine Agenda für mehr Dynamik, sozialen Ausgleich und ökologische Nachhaltigkeit. Fortschrittsbericht," WIFO Studies, WIFO, number 58885, February.
    2. Alexander Krenek & Mark Sommer & Margit Schratzenstaller, 2019. "Sustainability-oriented Future EU Funding. A European Border Carbon Adjustment," WIFO Working Papers 587, WIFO.
    3. Stefan Schleicher & Christian Hofer & Alexander Zeitlberger & Milan Elkerbout, 2016. "Policy Brief: Facts and Figures for Finalising an Effective Reform of the EU Emissions Trading System," WIFO Studies, WIFO, number 59232.

    More about this item


    Environmental Economics and Policy;

    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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