The EU Emissions Trading Scheme. Allowance Prices, Trade Flows, Competitiveness Effects

37 Pages Posted: 29 Apr 2004

See all articles by Gernot Klepper

Gernot Klepper

Kiel Institute of World Economics

Sonja M. Peterson

Kiel Institute for the World Economy

Date Written: March 2004

Abstract

The upcoming European Emissions Trading Scheme (ETS) is one of the more controversial climate policy instruments. Predictions about its likely impact and its performance can at present only be made to a certain degree. As long as the National Allocations Plans are not finally settled the overall supply of allowances is not determined. In this paper we will identify key features and key impacts of the EU ETS by scanning the range of likely allocation plans using the simulation model DART. The analysis of the simulation results highlights a number of interesting details in terms of allowance trade flows between member countries, of allowance prices, and in terms of the role of the accession countries in the ETS.

Keywords: EU Emissions trading scheme, Kyoto targets, Computable general equilibrium model, DART

JEL Classification: D58, F18, Q48, Q54

Suggested Citation

Klepper, Gernot and Peterson, Sonja M., The EU Emissions Trading Scheme. Allowance Prices, Trade Flows, Competitiveness Effects (March 2004). FEEM Working Paper No. 49.04. Available at SSRN: https://ssrn.com/abstract=525342 or http://dx.doi.org/10.2139/ssrn.525342

Gernot Klepper (Contact Author)

Kiel Institute of World Economics ( email )

D-24100 Kiel
Germany

Sonja M. Peterson

Kiel Institute for the World Economy ( email )

Duesternbrooker Weg 120
D-24118 Kiel
Germany
0431/8814-406 (Phone)

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