The Allocation of European Union Allowances: Lessons, Unifying Themes and General Principles

35 Pages Posted: 17 Sep 2006

See all articles by Barbara K. Buchner

Barbara K. Buchner

International Energy Agency; Fondazione Eni Enrico Mattei (FEEM)

Carlo Carraro

Fondazione Eni Enrico Mattei (FEEM); Ca' Foscari University of Venice; CMCC - Euro Mediterranean Centre for Climate Change (Climate Policy Division); IPCC; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Centre for European Policy Studies, Brussels; Green Growth Knowledge Platform; International Center for Climate Governance

A. Denny Ellerman

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS)

Multiple version iconThere are 2 versions of this paper

Date Written: September 2006

Abstract

This paper is the concluding chapter of Rights, Rents and Fairness: Allocation in the European Emissions Trading Scheme, edited by the co-authors and forthcoming from Cambridge University Press. The main objective of this paper is to distill the lessons and general principles to be learnt from the allocation of allowances in the European Union Emission Trading Scheme (EU ETS), i.e. in the world's first experience with allocating carbon allowances to sub-national entities. We discuss the lessons that emerge from this experience and make some comments on what seem to be more general principles informing the allocation process and on what are the global implications of the EU ETS. As has become obvious during the first allocation phase, the diversity of experience among the Member States is considerable, so that it must be understood that these lessons and unifying themes are drawn from the experience of most of the Member States, not necessarily from all. Lessons and unifying observations are grouped in three categories: those concerning the conditions encountered, the processes employed, and the actual choices.

Keywords: Climate Change, Emission Trading, Allocation, Fairness, EU Policy

JEL Classification: C72, H23, Q25, Q28

Suggested Citation

Buchner, Barbara K. and Carraro, Carlo and Ellerman, A. Denny, The Allocation of European Union Allowances: Lessons, Unifying Themes and General Principles (September 2006). FEEM Working Paper No. 116.06, University Ca' Foscari of Venice, Dept. of Economics Research Paper Series No. 47/06, Available at SSRN: https://ssrn.com/abstract=929109 or http://dx.doi.org/10.2139/ssrn.929109

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