Governance of CO2 markets: Lessons from the EU ETS

Christian de Perthuis and Raphael Trotignon
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Christian de Perthuis: LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique

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Abstract: The European emissions trading scheme (EU ETS) is the centerpiece of Europe׳s climate policy. The system has been undermined variously by the weakness of its regulation, an undesirable overlap with other public policies and the far-reaching economic and financial crisis that caused the market price of allowances to plunge. This article attempts to identify the conditions for making the coming years of the EU ETS a success. It draws historical lessons from the eight years the scheme has been in operation, and then presents the various interventions by the public authorities currently under discussion in order to revive the market. Finally, the article proposes to draw lessons from monetary policy by outlining what might be the mandate of an Independent Carbon Market Authority, with responsibility for the dynamic management of the supply of allowances, and whose main mission would be to ensure the optimal linkage between the different temporal horizons of the climate strategy. This article could provide important lessons for schemes developing in the rest of the world, especially in South Korea or in China.

Keywords: Emission trading; Governance; EU ETS (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (63)

Published in Energy Policy, 2014, 75, ⟨10.1016/j.enpol.2014.05.033⟩

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Related works:
Journal Article: Governance of CO2 markets: Lessons from the EU ETS (2014)
Working Paper: Governance of CO2 markets: lessons from the EU ETS (2013)
Working Paper: Governance of CO2 markets: lessons from the EU ETS (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01504611

DOI: 10.1016/j.enpol.2014.05.033

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