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Industry-level emission trading between power producers in the EU

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  • Böhringer, Christoph

Abstract

In this paper we investigate how restrictions for emission trading to the energy-intensive power sector will affect the magnitude and distribution of abatement costs across EU countries vis-?-vis a comprehensive EU emission trading regime. We find that emission trading between European power sectors allows the harvest of a major part of the efficiency gains provided by full trade as compared to strictly domestic action. However, trade restrictions may create a more unequal distribution of abatement costs across member states than is the case for a comprehensive trade regime. The reason for this is that restricted permit trade enhances the secondary terms-of-trade benefits to EU member countries with low marginal abatement costs at the expense of the other EU member states.

Suggested Citation

  • Böhringer, Christoph, 2000. "Industry-level emission trading between power producers in the EU," ZEW Discussion Papers 00-46, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:5330
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    References listed on IDEAS

    as
    1. Bohringer, Christoph, 2000. "Cooling down hot air: a global CGE analysis of post-Kyoto carbon abatement strategies," Energy Policy, Elsevier, vol. 28(11), pages 779-789, September.
    2. Böhringer, Christoph & Jensen, Jesper & Rutherford, Thomas F., 1999. "Energy market projections and differentiated carbon abatement in the European Union," ZEW Discussion Papers 99-11, ZEW - Leibniz Centre for European Economic Research.
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    Cited by:

    1. Klepper, Gernot & Peterson, Sonja, 2004. "Das Europäische Emissionshandelssystem - effiziente Klimapolitik oder Gefahr für die europäische Wettbewerbsfähigkeit?," Open Access Publications from Kiel Institute for the World Economy 3260, Kiel Institute for the World Economy.
    2. Böhringer, Christoph & Vogt, Carsten, 2001. "Internationaler Klimaschutz: Nicht mehr als symbolische Politik?," ZEW Discussion Papers 01-06, ZEW - Leibniz Centre for European Economic Research.
    3. Christoph Bohringer & Heinz Welsch, 2006. "Burden sharing in a greenhouse: egalitarianism and sovereignty reconciled," Applied Economics, Taylor & Francis Journals, vol. 38(9), pages 981-996.
    4. Klepper, Gernot & Peterson, Sonja, 2004. "The EU emissions trading scheme allowance prices, trade flows and competitiveness effects," Open Access Publications from Kiel Institute for the World Economy 3270, Kiel Institute for the World Economy.
    5. Hallwood, Paul, 2007. "Contractual difficulties in environmental management: The case of wetland mitigation banking," Ecological Economics, Elsevier, vol. 63(2-3), pages 446-451, August.
    6. Christoph Böhringer & Henrike Koschel & Ulf Moslener, 2008. "Efficiency losses from overlapping regulation of EU carbon emissions," Journal of Regulatory Economics, Springer, vol. 33(3), pages 299-317, June.
    7. Klepper, Gernot & Peterson, Sonja, 2004. "The EU emissions trading scheme: allowance prices, trade flows, competitiveness effects," Kiel Working Papers 1195, Kiel Institute for the World Economy.
    8. Christoph Böhringer & Andreas Lange, 2005. "Mission Impossible !? On the Harmonization of National Allocation Plans under the EU Emissions Trading Directive," Journal of Regulatory Economics, Springer, vol. 27(1), pages 81-94, September.
    9. Löschel, Andreas & Lange, Andreas & Hoffmann, Tim & Böhringer, Christoph & Moslener, Ulf, 2004. "Assessing Emission Allocation in Europe: An Interactive Simulation Approach," ZEW Discussion Papers 04-40, ZEW - Leibniz Centre for European Economic Research.
    10. Böhringer, Christoph & Koschel, Henrike & Moslener, Ulf, 2006. "Efficiency Losses from Overlapping Economic Instruments in European Carbon Emissions Regulation," ZEW Discussion Papers 06-018, ZEW - Leibniz Centre for European Economic Research.
    11. Springer, Urs & Varilek, Matthew, 2004. "Estimating the price of tradable permits for greenhouse gas emissions in 2008-12," Energy Policy, Elsevier, vol. 32(5), pages 611-621, March.

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    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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