Abatement and Allocation in the Pilot Phase of the EU ETS

Corrado Di Maria, Barry Anderson and Frank Convery
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Barry Anderson: University College Dublin

No 2009.110, Working Papers from Fondazione Eni Enrico Mattei

Abstract: We use historical industrial emissions data to assess the level of abatement and overallocation that took place across European countries during the pilot phase (2005-2007)of the European Union Emission Trading Scheme. Using a dynamic panel data model, we estimate the counterfactual (business-as-usual) emissions scenario for EU member states. Comparing this baseline to allocated and verified emissions, we conclude that both overallocation and abatement occurred, along with under-allocation and emissions inflation. Over the three trading years of the pilot phase we find over-allocation of approximately 376 million EUAs (6%) and total abatement at the member state level of 107 Mt CO2 (1.8%). However, due to over-allocation and possible uncertainty about future allocation methodologies, we calculate that emissions inflation of approximately 119 Mt CO2 (2%) occurred, resulting in emissions over the pilot phase being approximately 12 Mt CO2 (0.2%) higher than they would have been in the absence of the EU ETS.

Keywords: Emissions Trading Scheme; Climate Policy; Dynamic Panel Data Analysis (search for similar items in EconPapers)
JEL-codes: C23 O13 Q54 Q58 (search for similar items in EconPapers)
Date: 2009-12
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Abatement and Allocation in the Pilot Phase of the EU ETS (2011)
Working Paper: Abatement and Allocation in the Pilot Phase of the EU ETS (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2009.110

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