Raising climate ambition in emissions trading systems: The case of the EU ETS and the 2021 review

IF 2.6 3区 经济学 Q1 ECONOMICS
Simon Quemin
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引用次数: 30

Abstract

We provide a quantitative assessment of policy options to inform the 2021 review of the EU Emissions Trading System (ETS) and raise climate ambition. We use a permit trading model in which firms utilize rolling finite planning horizons, which replicates historical price and banking developments well compared to an infinite horizon. When firms have bounded foresight, indirectly raising ambition through the Market Stability Reserve (MSR) is not equivalent to directly raising ambition through the emissions cap trajectory. Leveraging the MSR turns out to be efficiency improving as it compensates for firms’ bounded foresight by frontloading abatement efforts. We analyze the MSR interaction with the cap trajectory to exploit synergies and minimize the cost of raising ambition. We also provide a comparative assessment of a complete suite of changes in the MSR parameters. Whatever its parameters, MSR-induced resilience to demand shocks remains limited by design: the MSR acts more as an unconditional price support provider than as a responsive price stabilizer.

在排放交易体系中提高气候目标:欧盟排放交易体系和2021年审查的案例
我们提供了政策选择的定量评估,为2021年欧盟排放交易体系(ETS)的审查提供信息,并提高气候目标。我们使用许可交易模型,其中公司利用滚动有限规划范围,与无限范围相比,它可以很好地复制历史价格和银行发展。当企业具有有限的远见时,通过市场稳定储备(MSR)间接提高雄心并不等同于通过排放限额轨迹直接提高雄心。利用MSR被证明是提高效率,因为它补偿了企业的有限远见,通过预先加载减排努力。我们分析了MSR与上限轨迹的相互作用,以利用协同效应并最小化提高雄心的成本。我们还提供了一套完整的MSR参数变化的比较评估。无论其参数如何,MSR诱导的对需求冲击的弹性仍然受到设计的限制:MSR更多地充当无条件的价格支撑提供者,而不是响应性的价格稳定器。
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来源期刊
CiteScore
5.40
自引率
0.00%
发文量
41
期刊介绍: Resource and Energy Economics provides a forum for high level economic analysis of utilization and development of the earth natural resources. The subject matter encompasses questions of optimal production and consumption affecting energy, minerals, land, air and water, and includes analysis of firm and industry behavior, environmental issues and public policies. Implications for both developed and developing countries are of concern. The journal publishes high quality papers for an international audience. Innovative energy, resource and environmental analyses, including theoretical models and empirical studies are appropriate for publication in Resource and Energy Economics.
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