Over-Allocation or Abatement? A Preliminary Analysis of the EU Ets Based on the 2005 Emissions Data

49 Pages Posted: 21 Nov 2006

See all articles by Barbara K. Buchner

Barbara K. Buchner

International Energy Agency; Fondazione Eni Enrico Mattei (FEEM)

A. Denny Ellerman

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

Date Written: November 2006

Abstract

This paper provides an initial analysis of the EU ETS based on the installation-level data for verified emissions and allowance allocations in the first trading year. Those data, released on May 15, 2006, and subsequent updates revealed that CO2 emissions were about 4% lower than the allocated allowances. The main objective of the paper is to shed light on the extent to which over-allocation and abatement have taken place in 2005. We propose a measure by which over-allocation can be judged and provide estimates of abatement based on emissions data and indicators of economic activity as well as trends in energy and carbon intensity. Finally, we discuss the insights and implications that emerge from this tentative assessment.

Keywords: Climate Change, Emission Trading, Allocation, Environmental Effects

JEL Classification: D61, O1, Q51, Q54

Suggested Citation

Buchner, Barbara K. and Ellerman, A. Denny, Over-Allocation or Abatement? A Preliminary Analysis of the EU Ets Based on the 2005 Emissions Data (November 2006). FEEM Working Paper No. 139.06. Available at SSRN: https://ssrn.com/abstract=946091 or http://dx.doi.org/10.2139/ssrn.946091

Barbara K. Buchner (Contact Author)

International Energy Agency ( email )

9 rue de la Fédération
Paris
France
+33(0)140576687 (Phone)
+33(0)140576739 (Fax)

Fondazione Eni Enrico Mattei (FEEM) ( email )

Campo S. M. Formosa, Castello 5252
Venezia, 30122
Italy
+39 04 1271 1470 (Phone)
+39 04 1271 1461 (Fax)

A. Denny Ellerman

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

Villa La Fonte, via delle Fontanelle 18
50016 San Domenico di Fiesole
Florence, Florence 50014
Italy

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