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Combining cap-and-trade with offsets: Lessons from CER use in the EU ETS in 2008 and 2009

Author

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  • Raphael Trotignon

    () (PhD Student at Paris-Dauphine University (CGEMP/LEDa) and researcher at the Climate Economics Chair.)

Abstract

The EU ETS is the first full scale example of a cap and trade system linked to project based mechanisms. While most papers on the subject focus on the policy design point of view, few have analyzed the facts. Offsets have been used by European industrial installations in 2008 and 2009. If the linking with an offset mechanism is successful, one should find evidence that offsets are used on a large scale, i.e. that significant volumes of credits go from a large number of projects to a large number of installations, independently from their sector, size or position, and that the limit of import is fully used at the end of the phase. This paper is an ex-post analysis of offsets used in the EU ETS in terms of intensity, frequency, and efficiency. This allows us to answer partially those questions and to identify possible explaining factors.

Suggested Citation

  • Raphael Trotignon, 2011. "Combining cap-and-trade with offsets: Lessons from CER use in the EU ETS in 2008 and 2009," Working Papers 1103, Chaire Economie du climat.
  • Handle: RePEc:cec:wpaper:1103
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    File URL: http://www.chaireeconomieduclimat.org/RePEc/cec/wpaper/11-02_WP_2011-03_Trotignon-Use_of_Offsets_in_the_EU-ETS-CEC.pdf
    File Function: First version, 2011
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    References listed on IDEAS

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    Cited by:

    1. Hervé-Mignucci, Morgan, 2011. "Rôle du signal prix du carbone sur les décisions d'investissement des entreprises," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/8200 edited by Keppler, Jan Horst.
    2. Matthew Ranson & Robert N. Stavins, 2016. "Linkage of greenhouse gas emissions trading systems: learning from experience," Climate Policy, Taylor & Francis Journals, vol. 16(3), pages 284-300, April.
    3. Igor Shishlov & Valentin Bellassen, 2012. "10 lessons from 10 years of the CDM," Working Papers hal-01151437, HAL.
    4. Claudia Kettner & Daniela Kletzan-Slamanig & Angela Köppl, 2011. "The EU Emission Trading Scheme. Allocation Patterns and Trading Flows," WIFO Working Papers 402, WIFO.
    5. Vicente Medina & Angel Pardo & Roberto Pascual, 2013. "Carbon Credits: Who is the Leader of the Pack?," International Journal of Energy Economics and Policy, Econjournals, vol. 3(3), pages 210-220.

    More about this item

    Keywords

    EU ETS; Clean Development Mechanism; Linking;

    JEL classification:

    • Q49 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Other
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law

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