Emissions and Allowances in the EU Emissions Trading System after the Paris Agreement

Akin A. Cilekoglu ()
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Akin A. Cilekoglu: University of Barcelona

No 202401, AQR Working Papers from University of Barcelona, Regional Quantitative Analysis Group

Abstract: In this paper, I examine how allowances allocation affected emissions of power sector installations in the EU ETS following the Paris Agreements. The dataset I use covers the 2010-2022 period, includes the emissions and allowances of 4,498 installations operating in power sector across the 27 Member States of the European Union. I discover that installations receiving lower allowances in the first quartile (Q1) reduced their emissions by 3.5% from 2016 to 2022 compared to the 2010-2015 period. I find no evidence on the installations in second, third and fourth quartiles due to the country specific developments. I also show that country characteristics have a crucial role in policy effectiveness because the emissions of installations located in lower-income Member States entered into the EU at later stages did not fall.

Keywords: Emissions; Paris Agreement; Power sector; Climate change. JEL classification: Q40; Q48; O13; H32; L25. (search for similar items in EconPapers)
Pages: 38 pages
Date: 2024-02, Revised 2024-02
New Economics Papers: this item is included in nep-eec, nep-ene and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:aqr:wpaper:202401

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