Mission Impossible!? On the Harmonization of National Allocation Plans under the EU Emissions Trading Directive

Christoph Böhringer and Andreas Lange

No 04-15, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: Starting in 2005, the EU will implement a CO2 emissions trading scheme. In this paper we show that the outspoken goals of economic efficiency and free allocation of allowances are incompatible with harmonized allocation rules. In general, the assignment of allowances is endogenous and differs widely across countries, thereby substantiating concerns for implicit state aid and competitive distortions. We discuss potential adjustments to the Directive in order to allow for harmonization, i.e. for identical assignment factors to similar firms located in different EU countries.

Keywords: emissions trading; allowance allocation; national allocation plan; competitive distortions (search for similar items in EconPapers)
JEL-codes: D58 H21 H23 Q50 Q58 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (4)

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Journal Article: Mission Impossible !? On the Harmonization of National Allocation Plans under the EU Emissions Trading Directive (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:1848

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