Pricing Carbon

Carbon Leakage in the EU in the Light of the Paris Climate Agreement

“…Free allocation of emission allowances, often referred to as grandfathering, 65 has attracted most of the EU ETS related critiques. One of the main concerns regarding free allocation which served as the predominant method of distribution of allowances during the first two trading periods, and still constitutes the dominant method at the beginning of the third trading period, is that it enabled the sectors covered by the EU ETS to gain windfall profits.…”

“…68 The main difference between the two, however, lies in who pays for the emission reductions to whom. 69 When emission allowances are auctioned, the installation which buys the allowance makes payment for the allowance to the entity issuing it, mainly the government.…”

Carbon Markets: Past, Present, and Future

“…Today, that form of top-down global program seems far away, if not impossible. 20 Percentage of offsets allowed through NAPs from Ellerman et al (2010). This may reflect lingering benefits of the UK shift from coal to natural gas and German re-unification, both of which led to significant emission reductions against 1990 baselines.…”

Tokyo’s greenhouse gas emissions trading scheme: a model for sustainable megacity carbon markets

“…While economic theory has been making the argument for the economic efficiency and ecological effectiveness of tradable permit systems since the late 1960s (Tietenberg 2006), despite of some start-up problems, emissions trading systems such as the US SO 2 and NO X trading programs or the EU GHG ETS have even proven their merits in practice (Ellerman 2000, Ellerman et al 2010). It has also been shown, that in principle GHG ETS can be designed in such a way that they fulfill ambitious sustainability criteria (see Table 3) (Rudolph et al 2012), hence, not only satisfying requirements for economic efficiency and ecological effectiveness (Boemare/Quirion 2002, Fankhauser/Hepburn 2010 but also for social justice (Lerch 2011).…”