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The EU Emissions Trading Scheme. Allowance Prices, Trade Flows, Competitiveness Effects

Author

Listed:
  • Gernot Klepper

    (Kiel Institute for World Economics)

  • Sonja Peterson

    (Kiel Institute for World Economics)

Abstract

The upcoming European Emissions Trading Scheme (ETS) is one of the more controversial climate policy instruments. Predictions about its likely impact and its performance can at present only be made to a certain degree. As long as the National Allocations Plans are not finally settled the overall supply of allowances is not determined. In this paper we will identify key features and key impacts of the EU ETS by scanning the range of likely allocation plans using the simulation model DART. The analysis of the simulation results highlights a number of interesting details in terms of allowance trade flows between member countries, of allowance prices, and in terms of the role of the accession countries in the ETS.

Suggested Citation

  • Gernot Klepper & Sonja Peterson, 2004. "The EU Emissions Trading Scheme. Allowance Prices, Trade Flows, Competitiveness Effects," Working Papers 2004.49, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2004.49
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    References listed on IDEAS

    as
    1. Gagelmann, Frank & Hansjürgens, Bernd, 2002. "Climate protection through tradable permits: The EU proposal for a CO₂ emissions trading system in Europe," UFZ Discussion Papers 1/2002, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
    2. Johan Albrecht (ed.), 2002. "Instruments for Climate Policy," Books, Edward Elgar Publishing, number 2492.
    3. Klepper, Gernot & Peterson, Sonja & Springer, Katrin, 2003. "DART97: a description of the multi-regional, multi-sectoral trade model for the analysis of climate policies," Kiel Working Papers 1149, Kiel Institute for the World Economy.
    4. Christoph Bohringer, 2002. "Industry-level emission trading between power producers in the EU," Applied Economics, Taylor & Francis Journals, vol. 34(4), pages 523-533.
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    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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