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Inclusion of Consumption into Emissions Trading Systems: Legal Design and Practical Administration

Author

Listed:
  • Roland Ismer
  • Manuel Haussner
  • Karsten Neuhoff
  • William Acworth

Abstract

A world of unequal carbon prices requires measures aimed at preventing carbon leakage. Climate policy imperatives demand that such measures must be compatible with the goal of sending a carbon price signal down the value chain. For carbon intensive materials, the combination of dynamic free allocation combined with Inclusion of Consumption (IoC) into emissions trading systems such as the European Union Emissions Trading Scheme (EU ETS) arguably fulfils both the aims of preventing carbon leakage and of sending the price signal. The paper presents concrete proposals regarding the legal design and practical administration of this mechanism. It argues that the IoC is, provided appropriate choices are made, ripe for implementation.

Suggested Citation

  • Roland Ismer & Manuel Haussner & Karsten Neuhoff & William Acworth, 2016. "Inclusion of Consumption into Emissions Trading Systems: Legal Design and Practical Administration," Discussion Papers of DIW Berlin 1579, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp1579
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    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.534388.de/dp1579.pdf
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    Cited by:

    1. Vera Zipperer & Misato Sato & Karsten Neuhoff, 2017. "Benchmarks for Emissions Trading – General Principles for Emissions Scope," Discussion Papers of DIW Berlin 1712, DIW Berlin, German Institute for Economic Research.
    2. Karsten Neuhoff & Roland Ismer & William Acworth & Andrzej Ancygier & Carolyn Fischer & Manuel Haussner & Hanna-Liisa Kangas & Yong-Gun Kim & Clayton Munnings & Anne Owen & Stephan Pauliuk & Oliver Sa, 2016. "Eine Option für den Emissionshandel nach 2020: Einbeziehung des Konsums emissionsintensiver Materialien; Ergebnisse eines Forschungsprojektes des Netzwerkes Climate Strategies," DIW Berlin: Politikberatung kompakt, DIW Berlin, German Institute for Economic Research, volume 111, number pbk111, Enero-Abr.

    More about this item

    Keywords

    Carbon pricing; value chain; consumption charge;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L61 - Industrial Organization - - Industry Studies: Manufacturing - - - Metals and Metal Products; Cement; Glass; Ceramics

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