EU ETS Phase 3 benchmarks: Implications and potential flaws

Stephen Lecourt

Working Papers from Chaire Economie du climat

Abstract: In its third Phase (2013-20), the European Union Emissions Trading Scheme allocation methodology is shifting from grandfathering to a combination of auctioning and benchmarking. Free allocation is now be devoted to non-electricity generators only (save exemption), and is linearly decreasing throughout the Phase with a view of no free allocation in 2027. Benchmark-based free allocation is meant to reward lowest CO2-intensive installations as opposed to grandfathering, which allocated allowances based on historical emissions levels. This policy note describes the concrete implications involved by this shift in allocation methodology, and addresses the potential flaws of benchmarking-based allocation, using data from French nstallations’ Phase 3 provisional free allocation.

Keywords: EU ETS; Benchmarks; Preliminary amounts; Carbon leakage; Historical Activity Level (search for similar items in EconPapers)
Pages: 18 pages
Date: 2013
New Economics Papers: this item is included in nep-ene, nep-env, nep-eur and nep-reg
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Citations: View citations in EconPapers (3)

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http://www.chaireeconomieduclimat.org/RePEc/cec/wp ... urt-Benchmarking.pdf First version, 2013 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:cec:wpaper:1305

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