IDEAS home Printed from https://ideas.repec.org/p/ete/etewps/ete0002.html
   My bibliography  Save this paper

Efficiency and Equity of the EU Burden Sharing Agreement

Author

Listed:
  • Johan Eyckmans

    () (K.U.Leuven, C.E.S., Energy, Transport and Environment)

  • Jan Cornillie

Abstract

In this paper we investigate the EU Burden Sharing Agreement on the distribution of the Kyoto emission reduction target over the EU member states. We use an inverse welfare optimum approach to compute the implicit weights making the Burden Sharing Agreement a welfare optimum for the EU. This methodology enables us to visualise the efficiency-equity trade off which was made by the EU negotiators. We present simulations based on marginal carbon emission abatement cost curves estimated on data generated by the GEM-E3 Europe general equilibrium model. Our simulations reveal that the EU Burden Sharing Agreement improves in terms of cost efficiency upon a uniform reduction assignment but that substantial differences in marginal costs persist. Some poorer EU member states like Portugal and Spain have been allowed by the agreement to increase their emissions considerably but, even if we do not care about distributional justice, their allowances are too low according to the inverse optimum approach. Also Sweden, the Netherlands and Belgium should abate less in order to improve cost efficiency. On the other hand, Germany, the UK, France and Denmark should curb their emissions by more than what has been assigned to them in the EU Burden Sharing Agreement. We show that introducing a measure of inequality aversion reinforces most of these conclusions. We also apply the inverse optimum approach to a scenario in which we allow for emission trading, possibly with market power. Sensitivity analysis shows that results are rather robust with respect to assumptions concerning baseline emissions and cost functions.

Suggested Citation

  • Johan Eyckmans & Jan Cornillie, 2000. "Efficiency and Equity of the EU Burden Sharing Agreement," Energy, Transport and Environment Working Papers Series ete0002, KU Leuven, Department of Economics - Research Group Energy, Transport and Environment, revised Jun 2002.
  • Handle: RePEc:ete:etewps:ete0002
    as

    Download full text from publisher

    File URL: https://lirias.kuleuven.be/bitstream/123456789/119771/1/ete-wp00-2.pdf
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Johannes Emmerling & Massimo Tavoni, 2013. "Geoengineering and Abatement: A “flat” Relationship under Uncertainty," Working Papers 2013.31, Fondazione Eni Enrico Mattei.
    2. Szabo, Laszlo & Hidalgo, Ignacio & Ciscar, Juan Carlos & Soria, Antonio, 2006. "CO2 emission trading within the European Union and Annex B countries: the cement industry case," Energy Policy, Elsevier, vol. 34(1), pages 72-87, January.
    3. Anabela Botelho & Eduarda Fernandes & Lígia Costa Pinto, 2010. "An experimental analysis of grandfathering vs dynamic auctioning in the EU ETS," NIMA Working Papers 39, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.

    More about this item

    Keywords

    welfare economics; inverse optimum; emission trading; marginal abatement cost curves;

    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:ete:etewps:ete0002. 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: (library EBIB). General contact details of provider: http://edirc.repec.org/data/etkulbe.html .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.