Renewable electricity is the backbone for a net-zero carbon society. This paper esti- mates the national and international emissions effect of German renewable electricity in the years 2017 to 2019 using a Random Forest algorithm, finding negative but hetero- geneous effects on emissions demand. A fraction of the estimated emission reductions translate into allowance cancellations in the EU ETS and thereby reduce overall long- term emissions.
{"title":"The Real Substitution Effect of Renewable Electricity: An Empirical Analysis for Germany","authors":"Philip Schnaars","doi":"10.2139/ssrn.3411782","DOIUrl":"https://doi.org/10.2139/ssrn.3411782","url":null,"abstract":"Renewable electricity is the backbone for a net-zero carbon society. This paper esti- mates the national and international emissions effect of German renewable electricity in the years 2017 to 2019 using a Random Forest algorithm, finding negative but hetero- geneous effects on emissions demand. A fraction of the estimated emission reductions translate into allowance cancellations in the EU ETS and thereby reduce overall long- term emissions.","PeriodicalId":366242,"journal":{"name":"SRPN: Carbon Trading (Socially) (Topic)","volume":"37 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128539105","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper shows that, when the price of emission allowances is sufficiently high, emission trading schemes improve the emission efficiency of highly polluting firms. The efficiency gain comes from a relative decrease in emissions rather than a relative increase in operating revenue. Part of the improvement is realized via the acquisition of green firms. The size of the improvement depends on the initial allocation of free emission allowances: highly polluting firms receiving more emission allowances for free, such as firms on the carbon leakage list, have a weaker incentive to become more efficient. For identification, we exploit the tightening in EU ETS regulation in 2017, which led to a steep price increase of emission allowances and made the ETS regulation more binding for polluting firms.
{"title":"Going Green by Putting a Price on Pollution: Firm-level Evidence from the EU","authors":"Olivier De Jonghe, Klaas Mulier, G. Schepens","doi":"10.2139/ssrn.3725061","DOIUrl":"https://doi.org/10.2139/ssrn.3725061","url":null,"abstract":"This paper shows that, when the price of emission allowances is sufficiently high, emission trading schemes improve the emission efficiency of highly polluting firms. The efficiency gain comes from a relative decrease in emissions rather than a relative increase in operating revenue. Part of the improvement is realized via the acquisition of green firms. The size of the improvement depends on the initial allocation of free emission allowances: highly polluting firms receiving more emission allowances for free, such as firms on the carbon leakage list, have a weaker incentive to become more efficient. For identification, we exploit the tightening in EU ETS regulation in 2017, which led to a steep price increase of emission allowances and made the ETS regulation more binding for polluting firms.","PeriodicalId":366242,"journal":{"name":"SRPN: Carbon Trading (Socially) (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-10-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130720105","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Purpose - This study aims at investigating the value relevance of the European Emission Allowance (EUA) return and volatility on the equity value of the top listed European Power Generation Firms for the three trading phases of the European Emission Trading Scheme.
Design/Methodology/Approach - We employ the multifactor financial market model over the period 2005-2016 on daily basis for the return relevance relationship, whereas time series models such as ARMA and GARCH are applied on a weighted average portfolio of the sample firms to test serial correlation and volatility of returns.
Findings - Our findings are novel in which we show a positive and significant relevance of EUA return on equity return; however, a vanishing effect is seen as we move to further trading phases. Another remarkable finding is that the return relationship remains constant until a certain level in EUA price then inverts. Finally, we show that EUA is considered a systematic factor as firm and country specific features are not statistically significant.
Originality/Value - To our knowledge, this study would be the first to offer recent and comprehensive findings on the economic and financial implications of the European Emission Trading Scheme for the three trading phases. Additionally, the research offers time series robustness check besides the standard regression analysis and shows that there is an optimal EUA price that triggers polluters’ decision on emission and generation.
{"title":"European Emission Allowance and the Equity Markets: Evidence from Further Trading Phases","authors":"Murad Harasheh, A. Amaduzzi","doi":"10.2139/ssrn.3474928","DOIUrl":"https://doi.org/10.2139/ssrn.3474928","url":null,"abstract":"Purpose - This study aims at investigating the value relevance of the European Emission Allowance (EUA) return and volatility on the equity value of the top listed European Power Generation Firms for the three trading phases of the European Emission Trading Scheme.<br><br>Design/Methodology/Approach - We employ the multifactor financial market model over the period 2005-2016 on daily basis for the return relevance relationship, whereas time series models such as ARMA and GARCH are applied on a weighted average portfolio of the sample firms to test serial correlation and volatility of returns. <br><br>Findings - Our findings are novel in which we show a positive and significant relevance of EUA return on equity return; however, a vanishing effect is seen as we move to further trading phases. Another remarkable finding is that the return relationship remains constant until a certain level in EUA price then inverts. Finally, we show that EUA is considered a systematic factor as firm and country specific features are not statistically significant. <br><br>Originality/Value - To our knowledge, this study would be the first to offer recent and comprehensive findings on the economic and financial implications of the European Emission Trading Scheme for the three trading phases. Additionally, the research offers time series robustness check besides the standard regression analysis and shows that there is an optimal EUA price that triggers polluters’ decision on emission and generation.<br>","PeriodicalId":366242,"journal":{"name":"SRPN: Carbon Trading (Socially) (Topic)","volume":"24 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-10-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127181851","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We assess the effects of the European Union emission trading scheme (EU ETS) in delivering low-carbon investments at the firm level, by modeling a price taker electricity producer subject to the EU ETS jurisdiction. We compute, via Least Squares Monte Carlo (LSMC) methods, the value of the real option the greenhouse gas emitter has, consisting in the opportunity to switch from its current high-carbon technology to a cleaner one. We evaluate this real option by proposing an extension to the model presented by Brauneis et al, introducing a different stochastic process, both for fuel and carbon prices, in place of the geometric brownian motion (GBM). Specifically, we propose a Brennan-Schwarz model, which exhibits positive mean-reverting prices, for fuel and a Variance Gamma (VG) specification for carbon prices. Moreover, we further analyze the investment decision problem, in case of a CO2 price stabilization mechanism, by explicitly computing the expected value of the investment project by means of Fourier methods. Our results show that the introduction of a price stabilization mechanisms, in this case a carbon floor price, significantly affects the timing of the investment decision, supporting emission related investments.
{"title":"Price Dynamics in the EU ETS and Evaluation of Its Ability to Boost Emission-Related Investment Decisions","authors":"M. Flora, Tiziano Vargiolu","doi":"10.2139/ssrn.3085597","DOIUrl":"https://doi.org/10.2139/ssrn.3085597","url":null,"abstract":"We assess the effects of the European Union emission trading scheme (EU ETS) in delivering low-carbon investments at the firm level, by modeling a price taker electricity producer subject to the EU ETS jurisdiction. We compute, via Least Squares Monte Carlo (LSMC) methods, the value of the real option the greenhouse gas emitter has, consisting in the opportunity to switch from its current high-carbon technology to a cleaner one. We evaluate this real option by proposing an extension to the model presented by Brauneis et al, introducing a different stochastic process, both for fuel and carbon prices, in place of the geometric brownian motion (GBM). Specifically, we propose a Brennan-Schwarz model, which exhibits positive mean-reverting prices, for fuel and a Variance Gamma (VG) specification for carbon prices. Moreover, we further analyze the investment decision problem, in case of a CO2 price stabilization mechanism, by explicitly computing the expected value of the investment project by means of Fourier methods. Our results show that the introduction of a price stabilization mechanisms, in this case a carbon floor price, significantly affects the timing of the investment decision, supporting emission related investments.","PeriodicalId":366242,"journal":{"name":"SRPN: Carbon Trading (Socially) (Topic)","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-12-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114644297","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Michael Flaherty, A. Gevorkyan, Siavash Radpour, W. Semmler
The funding of climate mitigation and adaptation policies has become an essential issue in climate negotiations. Emissions trading schemes (ETS) and carbon tax policies are widely discussed as viable mitigation strategies, the revenue from which might then be used for adaptation efforts. In most current models, the burden of enacting mitigation and adaptation policies falls on current generations. This paper expands on a recent article by Sachs (2014) that proposes intertemporal burden sharing, suggesting that implementation of climate policies would represent a Pareto improving strategy for both current and future generations. In particular, this paper proposes that green bonds (also referred to as climate bonds) represent an immediately implementable opportunity to initiate Sachs’ plan; the issuance of green bonds could fund immediate investment in climate mitigation such that the debt might be repaid by the future generations, those who benefit most from reduced environmental damages. The Sachs model is a discrete time overlapping generations model which we generalize and turn into a continuous time version exhibiting three major stages. We solve this three phase model by using a new numerical procedure called NMPC that allows for finite horizon solutions and phase changes. We show that the issued bonds can be repaid and the debt is sustainable within a finite time horizon. We also study econometrically whether the current macroeconomic environment is conducive to successfully phasing in such climate bonds.
{"title":"Financing Climate Policies through Climate Bonds – A Three Stage Model and Empirics","authors":"Michael Flaherty, A. Gevorkyan, Siavash Radpour, W. Semmler","doi":"10.2139/ssrn.2881718","DOIUrl":"https://doi.org/10.2139/ssrn.2881718","url":null,"abstract":"The funding of climate mitigation and adaptation policies has become an essential issue in climate negotiations. Emissions trading schemes (ETS) and carbon tax policies are widely discussed as viable mitigation strategies, the revenue from which might then be used for adaptation efforts. In most current models, the burden of enacting mitigation and adaptation policies falls on current generations. This paper expands on a recent article by Sachs (2014) that proposes intertemporal burden sharing, suggesting that implementation of climate policies would represent a Pareto improving strategy for both current and future generations. In particular, this paper proposes that green bonds (also referred to as climate bonds) represent an immediately implementable opportunity to initiate Sachs’ plan; the issuance of green bonds could fund immediate investment in climate mitigation such that the debt might be repaid by the future generations, those who benefit most from reduced environmental damages. The Sachs model is a discrete time overlapping generations model which we generalize and turn into a continuous time version exhibiting three major stages. We solve this three phase model by using a new numerical procedure called NMPC that allows for finite horizon solutions and phase changes. We show that the issued bonds can be repaid and the debt is sustainable within a finite time horizon. We also study econometrically whether the current macroeconomic environment is conducive to successfully phasing in such climate bonds.","PeriodicalId":366242,"journal":{"name":"SRPN: Carbon Trading (Socially) (Topic)","volume":"10 3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-05-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131588903","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The market for voluntary carbon offsets has grown steadily in the last decade, yet it remains a very small niche. Most emissions from business travel are still not offset. This paper exploits a unique dataset examining the decision to purchase carbon offsets at two academic conferences in environmental and ecological economics. We find that having the conference expenses covered by one's institution increases the likelihood of offsetting, but practical and ethical reservations as well as personal characteristics and preferences also play an important role. We draw lessons from the effect of objections on the use of offsets and discuss the implications for practitioners and policy-makers. Based on our findings, we conclude that ecological and environmental economists should be more involved in the design and use of carbon offsets.
{"title":"How Green are Economists?","authors":"S. Carattini, A. Tavoni","doi":"10.2139/ssrn.2800966","DOIUrl":"https://doi.org/10.2139/ssrn.2800966","url":null,"abstract":"The market for voluntary carbon offsets has grown steadily in the last decade, yet it remains a very small niche. Most emissions from business travel are still not offset. This paper exploits a unique dataset examining the decision to purchase carbon offsets at two academic conferences in environmental and ecological economics. We find that having the conference expenses covered by one's institution increases the likelihood of offsetting, but practical and ethical reservations as well as personal characteristics and preferences also play an important role. We draw lessons from the effect of objections on the use of offsets and discuss the implications for practitioners and policy-makers. Based on our findings, we conclude that ecological and environmental economists should be more involved in the design and use of carbon offsets.","PeriodicalId":366242,"journal":{"name":"SRPN: Carbon Trading (Socially) (Topic)","volume":"24 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-05-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130713629","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
To estimate the potential impact of California’s cap-and-trade program on the state’s energy-intensive, trade-exposed manufacturing industries, this paper uses confidential plant-level Census data to model the effect of historical energy prices on plant-level output, employment, and value added, both inside and outside California, holding constant foreign energy prices. Simulation of the model for an assumed compliance cost of $10 per metric ton of carbon dioxide equivalent (CO2) in California and zero outside the state yields 0 to 3 percent short-term (one year) impacts for almost a third of the industries studied with no output-based rebating. The largest losses are estimated in glass container manufacturing (17 percent), paperboard mills (14 percent), automobile manufacturing (13 percent), iron and steel mills and ferroalloy manufacturing (12 percent), and poultry processing (11 percent); these industries are among the most energy intensive of those studied. Estimated losses for another group of five industries are about 10 percent. These losses should be compared to an overall average one year loss of about 5.7 percent across all the California energy-intensive, trade-exposed industries studied. Simulations of higher compliance costs (up to $22 per metric ton of CO2) result in correspondingly larger losses. Over the long run, defined as a five-year period, the results suggest that increases in California's energy prices relative to those in nearby states have smaller effects than those effects seen over 1 year. Over this longer period, the largest output losses are below 1 percent, with most industries experiencing output losses below 0.1 percent, although for a variety of technical reasons the authors offer caution when interpreting the industry-specific long-run results.
{"title":"Employment and Output Leakage Under California's Cap-and-Trade Program","authors":"W. Gray, Joshua Linn, R. Morgenstern","doi":"10.2139/ssrn.2789820","DOIUrl":"https://doi.org/10.2139/ssrn.2789820","url":null,"abstract":"To estimate the potential impact of California’s cap-and-trade program on the state’s energy-intensive, trade-exposed manufacturing industries, this paper uses confidential plant-level Census data to model the effect of historical energy prices on plant-level output, employment, and value added, both inside and outside California, holding constant foreign energy prices. Simulation of the model for an assumed compliance cost of $10 per metric ton of carbon dioxide equivalent (CO2) in California and zero outside the state yields 0 to 3 percent short-term (one year) impacts for almost a third of the industries studied with no output-based rebating. The largest losses are estimated in glass container manufacturing (17 percent), paperboard mills (14 percent), automobile manufacturing (13 percent), iron and steel mills and ferroalloy manufacturing (12 percent), and poultry processing (11 percent); these industries are among the most energy intensive of those studied. Estimated losses for another group of five industries are about 10 percent. These losses should be compared to an overall average one year loss of about 5.7 percent across all the California energy-intensive, trade-exposed industries studied. Simulations of higher compliance costs (up to $22 per metric ton of CO2) result in correspondingly larger losses. Over the long run, defined as a five-year period, the results suggest that increases in California's energy prices relative to those in nearby states have smaller effects than those effects seen over 1 year. Over this longer period, the largest output losses are below 1 percent, with most industries experiencing output losses below 0.1 percent, although for a variety of technical reasons the authors offer caution when interpreting the industry-specific long-run results.","PeriodicalId":366242,"journal":{"name":"SRPN: Carbon Trading (Socially) (Topic)","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-05-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127898027","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
There are conflicting views on how to handle permits for greenhouse gases in cost-bene fit analysis. This paper aims at clarifying within a simple general equilibrium model how to treat di fferent kinds of tradable permits in economic evaluations of projects. Within a framework that reminds of the EU Emissions Trading System (EU ETS), the paper looks at cost-benefi t rules for a small project providing a public good, interpreted as a shortcut for infrastructure, using a fossil fuel and a renewable as inputs. In addition, it illustrates the Samuelson condition for the optimal provision of the public good, discusses briefly how to assess the EU permit system for sectors not covered under the EU ETS, as well as taxes and permits used to combat acid rain, and provides an illustration of the magnitude of the bias incurred if permits are valued at the marginal damage cost. The paper also introduces electricity ("green") certi ficates, a cousin to tradable permits, as well as well as energy savings ("white") certi ficates. Finally, a cap on the output of a commodity is considered.
{"title":"On the Treatment of Emissions Trading and Green and White Certificates in Cost-Benefit Analysis","authors":"P. Johansson","doi":"10.2139/ssrn.2824983","DOIUrl":"https://doi.org/10.2139/ssrn.2824983","url":null,"abstract":"There are conflicting views on how to handle permits for greenhouse gases in cost-bene fit analysis. This paper aims at clarifying within a simple general equilibrium model how to treat di fferent kinds of tradable permits in economic evaluations of projects. Within a framework that reminds of the EU Emissions Trading System (EU ETS), the paper looks at cost-benefi t rules for a small project providing a public good, interpreted as a shortcut for infrastructure, using a fossil fuel and a renewable as inputs. In addition, it illustrates the Samuelson condition for the optimal provision of the public good, discusses briefly how to assess the EU permit system for sectors not covered under the EU ETS, as well as taxes and permits used to combat acid rain, and provides an illustration of the magnitude of the bias incurred if permits are valued at the marginal damage cost. The paper also introduces electricity (\"green\") certi ficates, a cousin to tradable permits, as well as well as energy savings (\"white\") certi ficates. Finally, a cap on the output of a commodity is considered.","PeriodicalId":366242,"journal":{"name":"SRPN: Carbon Trading (Socially) (Topic)","volume":"47 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-05-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134361295","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The EU has a consolidated climate and energy regulation: it played a pioneering role by adopting a wide range of climate change policies and establishing the first regional Emission Trading Scheme (EU ETS). These policies, however, raise several concerns regarding both their environmental effectiveness and their potentially negative effect on the economy, especially in terms of growth and competitiveness. The paper reviews the European experience in order to understand if these concerns are supported by quantitative evidence. It thus focuses on key economic indicators, such as costs, competitiveness and carbon leakage as assessed by quantitative ex-ante and ex-post analyses. A dedicated section, extends the investigation to the potential extra-EU spillover of the EU mitigation policy with a particular attention to developing countries. The objective of the paper is to highlight both the limits and the opportunities of the EU regulatory framework in order to offer policy insights to emerging and developing countries that are on the way to implement climate change measures. Overall, the European experience shows that the worries about the costs and competitiveness losses induced by climate regulation are usually overestimated, especially in the long term. In addition, a tightening climate policy regime in the EU might in fact negatively impact developing countries via deteriorated trade relations. Nonetheless it tends to facilitate a resource relocation that if well governed could be beneficial to those countries where the poor are mainly involved in rural activities.
{"title":"Economic Implications of EU Mitigation Policies: Domestic and International Effects","authors":"F. Bosello, M. Davide, I. Alloisio","doi":"10.2139/ssrn.2771046","DOIUrl":"https://doi.org/10.2139/ssrn.2771046","url":null,"abstract":"The EU has a consolidated climate and energy regulation: it played a pioneering role by adopting a wide range of climate change policies and establishing the first regional Emission Trading Scheme (EU ETS). These policies, however, raise several concerns regarding both their environmental effectiveness and their potentially negative effect on the economy, especially in terms of growth and competitiveness. The paper reviews the European experience in order to understand if these concerns are supported by quantitative evidence. It thus focuses on key economic indicators, such as costs, competitiveness and carbon leakage as assessed by quantitative ex-ante and ex-post analyses. A dedicated section, extends the investigation to the potential extra-EU spillover of the EU mitigation policy with a particular attention to developing countries. The objective of the paper is to highlight both the limits and the opportunities of the EU regulatory framework in order to offer policy insights to emerging and developing countries that are on the way to implement climate change measures. Overall, the European experience shows that the worries about the costs and competitiveness losses induced by climate regulation are usually overestimated, especially in the long term. In addition, a tightening climate policy regime in the EU might in fact negatively impact developing countries via deteriorated trade relations. Nonetheless it tends to facilitate a resource relocation that if well governed could be beneficial to those countries where the poor are mainly involved in rural activities.","PeriodicalId":366242,"journal":{"name":"SRPN: Carbon Trading (Socially) (Topic)","volume":"40 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-04-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126977853","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
As part of its response to climate change the 1997 Kyoto Protocol envisages the employment of emissions trading schemes (“ETS”) to provide a market based incentive to reduce emissions and to engage in carbon sequestration activities. Such schemes would also serve to encourage the creation of an industry focused on energy conservation and alternatives to energy production – so called “green” or “clean” energy.Whilst a number of jurisdictions have introduced ETSs there is no definitive model. In 2010 the Tokyo Metropolitan Government (“TMG”) established an ETS and currently Australia has had a comprehensive nationwide regime in place since 1 July 2012. Notably the approaches adopted in the two jurisdictions have marked differences.It is proposed to compare the two regimes with a view to identifying lessons for ETS design and implementation. It will be identified that the TMG regime might be properly described as a “reductions regime” emphasizing domestic emissions reductions with the market only playing a secondary function. On the other hand, the Australian regime is a true “allowances regime” designed to permit market forces to operate with less constraint and, thereby, encourage reductions in those (linked) jurisdictions where the marginal cost of abatement is lowest.Both regimes were implemented with a phase in period envisaged. The TMG regime was the culmination of ten years of information gathering, relationship building and the generation of expertise. The Australian regime initially established a fixed price period to avoid the possibility of price volatility with attendant negative implications for business investment decisions.However the future of the two regimes could not be more different. Whilst the TMG regime is being promoted as a blueprint for other jurisdictions and was not even an issue for consideration during the recent local government elections in Tokyo (where the government changed), the Australian regime was the primary issue in contention during the September 2013 Australian national election. With the election of a conservative government arguing a mandate to repeal the ETS its future rests with minority parties in the country’s upper house.
{"title":"A Comparison of the Australian and Tokyo Emissions Trading Schemes","authors":"Justin Dabner","doi":"10.2139/ssrn.2707899","DOIUrl":"https://doi.org/10.2139/ssrn.2707899","url":null,"abstract":"As part of its response to climate change the 1997 Kyoto Protocol envisages the employment of emissions trading schemes (“ETS”) to provide a market based incentive to reduce emissions and to engage in carbon sequestration activities. Such schemes would also serve to encourage the creation of an industry focused on energy conservation and alternatives to energy production – so called “green” or “clean” energy.Whilst a number of jurisdictions have introduced ETSs there is no definitive model. In 2010 the Tokyo Metropolitan Government (“TMG”) established an ETS and currently Australia has had a comprehensive nationwide regime in place since 1 July 2012. Notably the approaches adopted in the two jurisdictions have marked differences.It is proposed to compare the two regimes with a view to identifying lessons for ETS design and implementation. It will be identified that the TMG regime might be properly described as a “reductions regime” emphasizing domestic emissions reductions with the market only playing a secondary function. On the other hand, the Australian regime is a true “allowances regime” designed to permit market forces to operate with less constraint and, thereby, encourage reductions in those (linked) jurisdictions where the marginal cost of abatement is lowest.Both regimes were implemented with a phase in period envisaged. The TMG regime was the culmination of ten years of information gathering, relationship building and the generation of expertise. The Australian regime initially established a fixed price period to avoid the possibility of price volatility with attendant negative implications for business investment decisions.However the future of the two regimes could not be more different. Whilst the TMG regime is being promoted as a blueprint for other jurisdictions and was not even an issue for consideration during the recent local government elections in Tokyo (where the government changed), the Australian regime was the primary issue in contention during the September 2013 Australian national election. With the election of a conservative government arguing a mandate to repeal the ETS its future rests with minority parties in the country’s upper house.","PeriodicalId":366242,"journal":{"name":"SRPN: Carbon Trading (Socially) (Topic)","volume":"237 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-12-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114602318","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：