Ex-ante evaluation of EU ETS during 2013–2030: EU-internal abatement

Jing Hu, Wina Crijns-Graus, Long Lam and Alyssa Gilbert

Energy Policy, 2015, vol. 77, issue C, 152-163

Abstract: This study investigates CO2 emission reduction within the EU resulting from the Emissions Trading Scheme (ETS) up to 2030. This is performed by constructing a baseline scenario without the ETS and assessing the impacts of the ETS, as currently designed. The results indicate that the ETS will start to impact emissions primarily after 2025 due to the prevalence of a sizable allowance surplus. The impact of approved (i.e. back-loading and 2.2% linear reduction factor (LRF)) and proposed (i.e. market stability reserve (MSR)) policy interventions and the inclusion of aviation, could accelerate the exhaustion of surplus and increase emission reductions during the investigated period. However, these measures would be insufficient to restore the scarcity of allowances and the corresponding carbon price before the start of ETS Phase IV, and the effectiveness of EU-internal abatement cannot be guaranteed until 2023. The effectiveness could be further reduced in the case of the economic shocks or the exclusion of international aviation.

Keywords: Policy evaluation; European union; Emissions trading scheme; EU-internal abatement; Allowance surplus (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:77:y:2015:i:c:p:152-163

DOI: 10.1016/j.enpol.2014.11.023

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