Linking the EU emissions trading scheme: economic implications of allowance allocation and global carbon constraints

We investigate the role of domestic allowance allocation and global emissions constraints for the carbon-market impacts of linking the EU Emissions Trading Scheme (ETS) internationally. Employing a quantitative simulation model of the global carbon market, we find that the economic benefits from connecting the European ETS to emerging non-EU schemes strongly depend on the regional allowance allocation of the linking participants: In a world of moderate carbon constraints, an economically efficient regional allowance allocation induces a much stronger fall in total compliance costs than a sub-optimal (i.e. too high) domestic allocation of emissions permits. However, a more efficient (i.e. stricter) allocation shifts abatement efforts and compliance costs to energy-intensive industries which are covered by the domestic ETS. We further find that committing to ambitious global emissions reduction targets (compatible with stabilizing CO₂ concentrations at 450 ppm) induces much stronger regional abatement efforts and substantially higher compliance costs for the abating regions. In such an ambitious climate policy regime, an efficient domestic allocation of allowances is even more important from an economic perspective: Here, linking emissions trading schemes diminishes the associated compliance costs on the largest scale.

Linking Russia with the European and global greenhouse gas emissions trading markets: three paths for greening the Russian assigned amount under the Kyoto Protocol

This article examines possibilities for linkage between the European Union Emissions Trading System (EU ETS) and Russia, with a view to enhancing cooperation on a broader scale than the project-based approaches that have been tested thus far. Three paths for possible EU-Russia linkage are presented by which the Russian Assigned Amount under the Kyoto Protocol can be greened in order to stimulate emissions trading: 1. Joint implementation—reductions earned via individual projects in Russia; 2. Greened allowances or green investment schemes; and 3. Linked cap-and-trade systems, in which a Russian domestic emissions trading system would link with the European Union Emissions Trading System. The authors conclude that the third option, emissions trading through linked domestic emissions trading systems, offers the best opportunities at the lowest transaction costs. The authors discuss useful innovative instruments like call options and slip level arrangements on government-to-government and business-to-business levels.

初始排放权分配对各省区碳交易策略及其减排成本的影响分析

碳排放权分配是我国碳交易机制设计的根本性问题之一.然而,不同初始分配方案对我国碳减排和宏观经济的影响尚不明确,成为制约碳交易市场快速发展的重要因素.本文以我国"十三五"时期碳排放强度下降目标为约束构建非线性规划模型,模拟了"祖父分配方案"、"支付能力方案"和"人口规模方案"3种初始排放权分配方案对各省区碳交易策略及其减...