Free allocations in EU ETS Phase 3: The impact of emissions-performance benchmarking for carbonintensive industry
From Phase 3 (2013-20) of the European Union Emissions Trading Scheme, carbon-intensive industrial emitters will receive free allocations based on harmonised, EU-wide benchmarks. This paper analyses the impacts of these new rules on allocations to key energy-intensive sectors across Europe. It explores an original dataset that combines recent data from the National Implementing Measures of 20 EU Member States with the Community Independent Transaction Log and other EU documents. The analysis reveals that free allocations to benchmarked sectors will be reduced significantly compared to Phase 2 (2008-12). This reduction should both increase public revenues from carbon auctions and has the potential to enhance the economic efficiency of the carbon market. The analysis also shows that changes in allocation vary mostly across installations within countries, raising the possibility that the carbon-cost competitiveness impacts may be more intense within rather than across countries. Lastly, the analysis finds evidence that the new benchmarking rules will, as intended, reward installations with better emissions performance and will improve harmonisation of free allocations in the EU ETS by reducing differences in allocation levels across countries with similar carbon intensities of production.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michael Pahle & Lin Fan & Wolf-Peter Schill, 2011.
"How Emission Certificate Allocations Distort Fossil Investments: The German Example,"
Discussion Papers of DIW Berlin
1097, DIW Berlin, German Institute for Economic Research.
- Pahle, Michael & Fan, Lin & Schill, Wolf-Peter, 2011. "How emission certificate allocations distort fossil investments: The German example," Energy Policy, Elsevier, vol. 39(4), pages 1975-1987, April.
- Pahle, Michael & Fan, Lin & Schill, Wolf-Peter, 2011. "How Emission Certificate Allocations Distort Fossil Investments: The German Example," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 1975-1987.
- Ralf Martin & Mirabelle Muûls & Laure B. de Preux & Ulrich J. Wagner, 2013.
"Industry Compensation Under Relocation Risk: A Firm-Level Analysis of the EU Emissions Trading Scheme,"
NBER Working Papers
19097, National Bureau of Economic Research, Inc.
- Ralf Martin & Mirabelle Mu?ls & Laure B. de Preux & Ulrich J. Wagner, 2014. "Industry Compensation under Relocation Risk: A Firm-Level Analysis of the EU Emissions Trading Scheme," American Economic Review, American Economic Association, vol. 104(8), pages 2482-2508, August.
- Ralf Martin & Mirabelle Muuls & Laure B. de Preux & Ulrich J. Wagner, 2014. "Industry compensation under relocation risk: a firm-level analysis of the EU emissions trading scheme," LSE Research Online Documents on Economics 59312, London School of Economics and Political Science, LSE Library.
- Ralf Martin & Mirabelle Muï¿½ls & Laure B. de Preux & Ulrich J. Wagner, 2012. "Industry compensation under relocation risk: a firm-level analysis of the EU Emissions Trading Scheme," GRI Working Papers 85, Grantham Research Institute on Climate Change and the Environment.
- Ralf Martin & Mirabelle Muûls & Ulrich J. Wagner & Laure B. de Preux, 2012. "Industry Compensation Under Relocation Risk: A Firm-Level Analysis of the EU Emissions Trading Scheme," CEP Discussion Papers dp1150, Centre for Economic Performance, LSE.
- Jan Abrell & Anta Ndoye Faye & Georg Zachmann, 2011.
"Assessing the impact of the EU ETS using firm level data,"
Working Papers of BETA
2011-15, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
- Georg Zachmann & Anta Ndoye & Jan Abrell, 2011. "Assessing the impact of the EU ETS using firm level data," Working Papers 579, Bruegel.
- Ellerman,A. Denny & Convery,Frank J. & ,, 2010. "Pricing Carbon," Cambridge Books, Cambridge University Press, number 9780521196475, May.
- repec:dau:papers:123456789/10174 is not listed on IDEAS
- Ahman, Markus & Burtraw, Dallas & Kruger, Joseph & Zetterberg, Lars, 2007. "A Ten-Year Rule to guide the allocation of EU emission allowances," Energy Policy, Elsevier, vol. 35(3), pages 1718-1730, March.
When requesting a correction, please mention this item's handle: RePEc:cec:wpaper:1302. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Climate Economics Chair)
If references are entirely missing, you can add them using this form.