Resilience of the EU ETS to contextual disturbance: the case of EU enlargement and its impact on ETS policymaking dynamics

Wang, Zexiang; Paavola, Jouni

doi:10.1080/09644016.2022.2043072

Cited by 3 publications

(2 citation statements)

References 34 publications

(50 reference statements)

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“…This structure results in a policy network of diverse stakeholders, with the EU Commission acting as a moderator of the network. Wang and Paavola (2022) demonstrated how the decentralized powers of the EU legislative triumvirate (the EU Commission, the European Parliament, and the European Council) fostered consensus building in the EU ETS to accommodate heterogeneity in the policy process.…”

Section: Literature Reviewmentioning

confidence: 99%

The divergence of South Korea's Emissions Trading Scheme (ETS) from the EU ETS: An institutional complementarity view

Joo,

Paavola,

Van Alstine

2023

Politics & Policy

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Emissions trading schemes (ETS) have spread across the globe to tackle climate change. However, limited attention has been given to how ETS characteristics and designs differ and why. We use the concept of institutional complementarity to explore how the EU ETS and South Korea's ETS (K‐ETS) adapt to complement established political economy. The EU ETS is characterized as a market with stakeholder ownership, while the K‐ETS is more regulatory in nature with government leadership. The EU ETS complements a decentralized political system with liberalized energy market, and the K‐ETS became compatible with the centralized majoritarian politics and a regulated electricity market. The ETSs have evolved incrementally, and they are not likely to link in the foreseeable future due to divergence. We suggest a strong focus on “how to adapt” an ETS to its own institution rather than adopting the established blueprint model in countries with a strong regulatory style of governance.Related ArticlesCaliskan, Cantay. 2020. “The Influence of Elite Networks on Green Policy Making.” Politics & Policy 48(6): 1104–37. https://doi.org/10.1111/polp.12382.Tanaka, Yugo, Andrew Chapman, Tetsuo Tezuka, and Shigeki Sakurai. 2020. “Multiple Streams and Power Sector Policy Change: Evidence from the Feed‐In Tariff Policy Process in Japan.” Politics & Policy 48(3): 464–89. https://doi.org/10.1111/polp.12357.von Malmborg, Fredrik. 2023. “Combining the Advocacy Coalition Framework and Argumentative Discourse Analysis: The Case of the ‘Energy Efficiency First’ Principle in EU Energy and Climate Policy.” Politics & Policy 51(2): 222–41. https://doi.org/10.1111/polp.12525.

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Section: Literature Reviewmentioning

confidence: 99%

The divergence of South Korea's Emissions Trading Scheme (ETS) from the EU ETS: An institutional complementarity view

Joo,

Paavola,

Van Alstine

2023

Politics & Policy

Self Cite

View full text Add to dashboard Cite

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“…Sattarhoff et al (2022) [ 51 ] calculated the information efficiency of the European carbon market using a new method based on intermittency coefficients. Wangle Zexiang et al (2023) [ 52 ] developed an institutional flexibility framework to study how the established norms and institutional constellations of the EU legislative trinity contribute to mitigating the impact of expanding designated ETS policies, providing a new perspective for assessing the dynamic performance of the ETS.…”

Section: Introductionmentioning

confidence: 99%

The price behavior characteristics of China and Europe carbon emission trading market based on the perspective of time scaling and expected returns

Zhang,

Cheng

2024

PLoS ONE

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China has the world’s largest carbon market in terms of greenhouse gas emissions, but its system needs to be improved and enhanced. In comparison, the European carbon market stands as the most mature and well-developed carbon market globally. Carbon trading prices, serving as a barometer for the carbon market, are significantly influenced by investor behavior. Therefore, it is necessary to analyze the characteristics of carbon trading prices in both China and Europe, considering the impact of investor trading intervals and psychological expected returns. This study utilizes the Zipf method to characterize the dynamic behavior of carbon trading prices between China and Europe, conducting a comparative analysis. The results show distinctive asymmetry in the behavior of carbon trading prices in both markets. In the Chinese market, when τ < 277, the absolute deviation da(τ, ε) value gradually changes but consistently indicates a bullish trend. However, when τ ≥ 277, the da(τ, ε) value surges rapidly, reflecting a pronounced bullish sentiment among investors toward carbon trading prices in China. In the European market, within the sample period, regardless of variations in τ and ε, the da(τ, ε) value shows a linear upward trend, indicating a significant overall bullishness in prices. This suggests a higher probability of long-term bullishness in carbon trading prices. Investors’ investment time scale (τ) and expected returns (ε) both influence the behavior of carbon trading prices in both China and Europe. Generally, a longer τ implies a higher probability of bullishness. As for ε, higher values lead to more extreme judgments on price movements, resulting in greater distortion in carbon trading prices. Short-term investors (τ<1 month) anticipate extreme fluctuations, exhibiting random behavior when ε < 0.15 and converging rapidly to extreme values of 1 or 0 when ε ≥ 0.15. Long-term investors (τ>quarter) are less biased, expressing a bullish outlook on both Chinese and European carbon prices. With increasing ε, the probability of bullishness either increases or decreases rapidly until reaching the saturation point. Once saturated, there is no further distortion in carbon price behavior. Furthermore, the Chinese carbon market displays a positive trend in carbon trading prices and a higher probability of long-term bullishness. For the European market, lower expected returns contribute to considerable carbon trading price fluctuations, exacerbating risk and uncertainty. The results of this study contribute to understanding the diverse trading behaviors in Chinese and European carbon markets and provide guidance for avoiding extreme volatility in carbon trading prices.

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Luxury-focused carbon taxation improves fairness of climate policy

et al. 2023

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Resilience of the EU ETS to contextual disturbance: the case of EU enlargement and its impact on ETS policymaking dynamics

Cited by 3 publications

References 34 publications

The divergence of South Korea's Emissions Trading Scheme (ETS) from the EU ETS: An institutional complementarity view

The divergence of South Korea's Emissions Trading Scheme (ETS) from the EU ETS: An institutional complementarity view

The price behavior characteristics of China and Europe carbon emission trading market based on the perspective of time scaling and expected returns

Luxury-focused carbon taxation improves fairness of climate policy

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