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The Allocation of European Union Allowances: Lessons, Unifying Themes and General Principles

Author

Listed:
  • Barbara Buchner
  • Carlo Carraro
  • A. Denny Ellerman

Abstract

On January 1st, 2005, the EU Emissions Trading Scheme (EU ETS) scheme was officially launched, only two years after the European Council adopted the EU Emissions Trading Directive (European Community 2003). As a consequence of this formal start, the world’s largest ever market in emissions has been established, and European companies now face a carbon-constrained reality in form of legally binding emission targets. Within essentially one year, 2004, the international carbon market has gained momentum through major policy developments and quick market responses, which among others have enabled the establishment of a framework for the EU carbon market.

Suggested Citation

  • Barbara Buchner & Carlo Carraro & A. Denny Ellerman, 2006. "The Allocation of European Union Allowances: Lessons, Unifying Themes and General Principles," Working Papers 0615, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
    • Handle: RePEc:mee:wpaper:0615
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    File URL: http://tisiphone.mit.edu/RePEc/mee/wpaper/2006-015.pdf
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    Citations

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    Cited by:

    1. Oberndorfer, Ulrich, 2008. "EU Emission Allowances and the Stock Market: Evidence from the Electricity Industry," ZEW Discussion Papers 08-059, ZEW - Leibniz Centre for European Economic Research.
    2. repec:ehu:ikerla:6418 is not listed on IDEAS
    3. Feng, Zhen-Hua & Wei, Yi-Ming & Wang, Kai, 2012. "Estimating risk for the carbon market via extreme value theory: An empirical analysis of the EU ETS," Applied Energy, Elsevier, vol. 99(C), pages 97-108.
    4. Oberndorfer, Ulrich, 2009. "EU Emission Allowances and the stock market: Evidence from the electricity industry," Ecological Economics, Elsevier, vol. 68(4), pages 1116-1126, February.
    5. Ralf Löschel, 2007. "Optimal Allocation of EU Emission Allowances under Imperfect Competition," Energy and Environmental Modeling 2007 24000033, EcoMod.
    6. Rogge, Karoline S. & Schleich, Joachim & Betz, Regina, 2006. "An early assessment of national allocation plans for phase 2 of EU emission trading," Working Papers "Sustainability and Innovation" S1/2006, Fraunhofer Institute for Systems and Innovation Research (ISI).
    7. Jiqiang Wang & Yinpeng Liu & Ying Fan & Jianfeng Guo, 2020. "The Impact of Industry on European Union Emissions Trading Market—From Network Perspective," Energies, MDPI, vol. 13(21), pages 1-16, October.
    8. Streimikiene, Dalia & Roos, Inge, 2009. "GHG emission trading implications on energy sector in Baltic States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(4), pages 854-862, May.
    9. Jos Sijm, 2012. "Tradable Carbon Allowances: The Experience of the European Union and Lessons Learned," Chapters, in: Chin Hee Hahn & Sang-Hyop Lee & Kyoung-Soo Yoon (ed.), Responding to Climate Change, chapter 3, Edward Elgar Publishing.
    10. Zhang, Yue-Jun & Wei, Yi-Ming, 2010. "An overview of current research on EU ETS: Evidence from its operating mechanism and economic effect," Applied Energy, Elsevier, vol. 87(6), pages 1804-1814, June.
    11. Bao-jun Tang & Pi-qin Gong & Cheng Shen, 2017. "Factors of carbon price volatility in a comparative analysis of the EUA and sCER," Annals of Operations Research, Springer, vol. 255(1), pages 157-168, August.
    12. Jean‐Michel Glachant, 2008. "La Deregulation Des Industries De Reseaux Comme Politique Institutionnelle De Creation De Marches Et De Mecanismes De Gouvernance," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 79(3‐4), pages 487-525, September.
    13. Adrien de Hauteclocque & Yannick Perez, 2011. "Law & Economics Perspectives on Electricity Regulation," RSCAS Working Papers 2011/21, European University Institute.
    14. Regina Betz & Karoline Rogge & Joachim Schleich, 2006. "EU emissions trading: an early analysis of national allocation plans for 2008-2012," Climate Policy, Taylor & Francis Journals, vol. 6(4), pages 361-394, July.
    15. Anger, Niels & Böhringer, Christoph & Oberndorfer, Ulrich, 2008. "Public Interest vs. Interest Groups: Allowance Allocation in the EU Emissions Trading Scheme," ZEW Discussion Papers 08-023, ZEW - Leibniz Centre for European Economic Research.
    16. Jean-Michel Glachant, 2012. "Regulating Networks in the New Economy," Review of Economics and Institutions, Università di Perugia, vol. 3(1).
    17. Christoph Böhringer, 2014. "Two Decades of European Climate Policy: A Critical Appraisal," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 8(1), pages 1-17, January.
    18. Ashwin Rode, 2021. "Rent Seeking over Tradable Emission Permits," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 78(2), pages 257-285, February.
    19. Gilbert E. Metcalf & Sergey Paltsev & John Reilly & Henry Jacoby & Jennifer F. Holak, 2008. "Analysis of U.S. Greenhouse Gas Tax Proposals," NBER Working Papers 13980, National Bureau of Economic Research, Inc.
    20. Bao-jun Tang & Cheng Shen & Yi-fan Zhao, 2015. "Market risk in carbon market: an empirical analysis of the EUA and sCER," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 75(2), pages 333-346, February.
    21. Tang, Bao-jun & Shen, Cheng & Gao, Chao, 2013. "The efficiency analysis of the European CO2 futures market," Applied Energy, Elsevier, vol. 112(C), pages 1544-1547.

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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