IDEAS home Printed from https://ideas.repec.org/p/aqr/wpaper/202401.html
   My bibliography  Save this paper

“Emissions and Allowances in the EU Emissions Trading System after the Paris Agreement”

Author

Listed:
  • Akin A. Cilekoglu

    (University of Barcelona)

Abstract

In this paper, I examine how allowances allocation affected emissions of power sector installations in the EU ETS following the Paris Agreements. The dataset I use covers the 2010-2022 period, includes the emissions and allowances of 4,498 installations operating in power sector across the 27 Member States of the European Union. I discover that installations receiving lower allowances in the first quartile (Q1) reduced their emissions by 3.5% from 2016 to 2022 compared to the 2010-2015 period. I find no evidence on the installations in second, third and fourth quartiles due to the country specific developments. I also show that country characteristics have a crucial role in policy effectiveness because the emissions of installations located in lower-income Member States entered into the EU at later stages did not fall.

Suggested Citation

  • Akin A. Cilekoglu, 2024. "“Emissions and Allowances in the EU Emissions Trading System after the Paris Agreement”," AQR Working Papers 202401, University of Barcelona, Regional Quantitative Analysis Group, revised Feb 2024.
    • Handle: RePEc:aqr:wpaper:202401
    as

    Download full text from publisher

    File URL: http://www.ub.edu/irea/working_papers/2024/202404.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Raphael Calel, 2020. "Adopt or Innovate: Understanding Technological Responses to Cap-and-Trade," American Economic Journal: Economic Policy, American Economic Association, vol. 12(3), pages 170-201, August.
    2. Diego R. Känzig & Maximilian Konradt, 2024. "Climate Policy and the Economy: Evidence from Europe’s Carbon Pricing Initiatives," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 72(3), pages 1081-1124, September.
    3. Paula Bustos, 2011. "Trade Liberalization, Exports, and Technology Upgrading: Evidence on the Impact of MERCOSUR on Argentinian Firms," American Economic Review, American Economic Association, vol. 101(1), pages 304-340, February.
    4. Cameron Hepburn & Michael Grubb & Karsten Neuhoff & Felix Matthes & Maximilien Tse, 2006. "Auctioning of EU ETS phase II allowances: how and why?," Climate Policy, Taylor & Francis Journals, vol. 6(1), pages 137-160, January.
    5. Mathy, Sandrine & Menanteau, Philippe & Criqui, Patrick, 2018. "After the Paris Agreement: Measuring the Global Decarbonization Wedges From National Energy Scenarios," Ecological Economics, Elsevier, vol. 150(C), pages 273-289.
    6. Joeri Rogelj & Michel den Elzen & Niklas Höhne & Taryn Fransen & Hanna Fekete & Harald Winkler & Roberto Schaeffer & Fu Sha & Keywan Riahi & Malte Meinshausen, 2016. "Paris Agreement climate proposals need a boost to keep warming well below 2 °C," Nature, Nature, vol. 534(7609), pages 631-639, June.
    7. Wu, Libo & Zhou, Ying & Qian, Haoqi, 2022. "Global actions under the Paris agreement: Tracing the carbon leakage flow and pursuing countermeasures," Energy Economics, Elsevier, vol. 106(C).
    8. repec:dau:papers:123456789/10174 is not listed on IDEAS
    9. Anger, Niels & Oberndorfer, Ulrich, 2008. "Firm performance and employment in the EU emissions trading scheme: An empirical assessment for Germany," Energy Policy, Elsevier, vol. 36(1), pages 12-22, January.
    10. Salman, Muhammad & Long, Xingle & Wang, Guimei & Zha, Donglan, 2022. "Paris climate agreement and global environmental efficiency: New evidence from fuzzy regression discontinuity design," Energy Policy, Elsevier, vol. 168(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Akin A. Cilekoglu, 2024. "Emissions and Allowances in the EU Emissions Trading System after the Paris Agreement," IREA Working Papers 202404, University of Barcelona, Research Institute of Applied Economics, revised Feb 2024.
    2. Jaraitė, Jūratė & Kurtyka, Oliwia & Ollivier, Hélène, 2022. "Take a ride on the (not so) green side: How do CDM projects affect Indian manufacturing firms’ environmental performance?," Journal of Environmental Economics and Management, Elsevier, vol. 114(C).
    3. Giovanni Marin & Marianna Marino & Claudia Pellegrin, 2018. "The Impact of the European Emission Trading Scheme on Multiple Measures of Economic Performance," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(2), pages 551-582, October.
    4. Dechezleprêtre, Antoine & Nachtigall, Daniel & Venmans, Frank, 2023. "The joint impact of the European Union emissions trading system on carbon emissions and economic performance," Journal of Environmental Economics and Management, Elsevier, vol. 118(C).
    5. Marit Klemetsen & Knut Einar Rosendahl & Anja Lund Jakobsen, 2020. "The Impacts Of The Eu Ets On Norwegian Plants’ Environmental And Economic Performance," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 11(01), pages 1-32, February.
    6. Oberndorfer, Ulrich, 2009. "EU Emission Allowances and the stock market: Evidence from the electricity industry," Ecological Economics, Elsevier, vol. 68(4), pages 1116-1126, February.
    7. Liu, Mengdi & Tan, Ruipeng & Zhang, Bing, 2021. "The costs of “blue sky”: Environmental regulation, technology upgrading, and labor demand in China," Journal of Development Economics, Elsevier, vol. 150(C).
    8. Knight, Eric, 2010. "The Economic Geography of European Carbon Market Trading," Working Papers 249382, Australian National University, Centre for Climate Economics & Policy.
    9. Joltreau, Eugénie & Sommerfeld, Katrin, 2016. "Why does emissions trading under the EU ETS not affect firms' competitiveness? Empirical findings from the literature," ZEW Discussion Papers 16-062, ZEW - Leibniz Centre for European Economic Research.
    10. Flori, Andrea & Borghesi, Simone & Marin, Giovanni, 2024. "The environmental-financial performance nexus of EU ETS firms: A quantile regression approach," Energy Economics, Elsevier, vol. 131(C).
    11. Aliénor Cameron & Marc Baudry, 2023. "The case for carbon leakage and border adjustments: where do economists stand?," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 25(3), pages 435-469, July.
    12. Liu, Yinan & Lv, Peiyao & Zhao, Hao, 2024. "Green innovation through trade: The impact of European Union emissions trading scheme on Chinese exporters," Journal of International Money and Finance, Elsevier, vol. 149(C).
    13. Giovanni Marin & Marianna Marino & Claudia Pellegrin, 2018. "The impact of the European Union Emission Trading Scheme on Multiple Measures of Economic Performance," Post-Print hal-01768870, HAL.
    14. Wan, Panbing & Zhang, ZhongXiang & Chen, Lin, 2024. "Environmental co-benefits of climate mitigation: Evidence from clean development mechanism projects in China," China Economic Review, Elsevier, vol. 85(C).
    15. Soberon, Alexandra & Mazzanti, Massimiliano & Musolesi, Antonio & Rodriguez-Poo, Juan M., 2025. "Efficient estimation of a partially linear panel data model with cross-sectional dependence," Journal of Multivariate Analysis, Elsevier, vol. 206(C).
    16. Ren, Shenggang & Yang, Xuanyu & Hu, Yucai & Chevallier, Julien, 2022. "Emission trading, induced innovation and firm performance," Energy Economics, Elsevier, vol. 112(C).
    17. Robaina Alves, Margarita & Rodríguez, Miguel & Roseta-Palma, Catarina, 2011. "Sectoral and regional impacts of the European carbon market in Portugal," Energy Policy, Elsevier, vol. 39(5), pages 2528-2541, May.
    18. Oberndorfer, Ulrich, 2008. "EU Emission Allowances and the Stock Market: Evidence from the Electricity Industry," ZEW Discussion Papers 08-059, ZEW - Leibniz Centre for European Economic Research.
    19. Fankhauser, Samuel & Hepburn, Cameron, 2010. "Designing carbon markets. Part I: Carbon markets in time," Energy Policy, Elsevier, vol. 38(8), pages 4363-4370, August.
    20. Joachim Wagner, 2012. "Exports, R&D and productivity: a test of the Bustos-model with German enterprise data," Economics Bulletin, AccessEcon, vol. 32(3), pages 1942-1948.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aqr:wpaper:202401. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bibiana Barnadas (email available below). General contact details of provider: https://edirc.repec.org/data/aqrubes.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.