Ways to improve the design of the EU emissions trading scheme: key issues and answers

Zhang, ZhongXiang (2004): Ways to improve the design of the EU emissions trading scheme: key issues and answers.

Abstract

The Europe Union is about to lunch the world’s first greenhouse gas emissions trading scheme in history. This represents an enormous challenge because there is no previous experience with such an unprecedented scheme, and because its final outcome might shape the design of future environmental market-based policies as well as the political viability of future efforts towards emissions reductions. There are five basic issues that not only will shape the final design of the scheme but also might hinder the performance of such a scheme, if not effectively addressed. They include universal vs. reduced scope, member country vs. European-wide sector objectives and allocations, allocation methodology and base year choice, energy mix and national security, and incentives for technological innovation. This paper aims to address these key issues to help to shape the final design of the scheme in a positive manner.

• Item Type: MPRA Paper
• Language: English
• Keywords: EU emissions trading scheme; Allowance allocations; Carbon price; Energy mix; Technological innovation; Competitiveness concerns
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q52 - Pollution Control Adoption and Costs ; Distributional Effects ; Employment Effects; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q48 - Government Policy; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q42 - Alternative Energy Sources; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate ; Natural Disasters and Their Management ; Global Warming; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q58 - Government Policy

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