Economics at your fingertips  

Policy options to improve the effectiveness of the EU emissions trading system: A multi-criteria analysis

Stefano Clo (), Susan Battles and Pietro Zoppoli

Energy Policy, 2013, vol. 57, issue C, 477-490

Abstract: This paper considers several policy options which have been proposed to improve the functioning of the ETS. These options require an intervention either on the ETS cap (−30% target, set-aside, carbon central bank, long-term target) or on the carbon price (European and national price floor). We analyse the impact of each policy on the ETS carbon price and emissions. A multi-criteria evaluation method is applied to compare the policy options against a plurality of environmental, economic and procedural criteria. We find that the final ranking depends on the goals to be achieved, i.e., the relative weights attributed to the criteria. When policymakers want mainly to support the carbon price both in the short and long-run, while improving ETS flexibility and harmonization, the CCB and the EU price floor are, respectively ranked as first and second-best options. As the preference for environmental and implementation goals gradually increases, the position of the EU price floor and CCB options tend to invert. The −30% target should be adopted when reducing emissions is the priority goal, while a national price floor is the worst option, in this case. Nevertheless, self-interested States looking for a relatively quick, feasible solution, may find it optimal.

Keywords: Multi-criteria analysis; Carbon central bank; Price floor (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.enpol.2013.02.015

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2021-12-19
Handle: RePEc:eee:enepol:v:57:y:2013:i:c:p:477-490