The contribution of economics to the analysis of climate change and uncertainty: a survey of approaches and findings
In: Kiel working paper 1212
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In: Kiel working paper 1212
In: Politikum: Analysen, Kontroversen, Bildung ; Vierteljahreszeitschrift, Band 7, Heft 2, S. 44-51
ISSN: 2701-1267
In: Politikum: Analysen, Kontroversen, Bildung ; Vierteljahreszeitschrift, Band 7, Heft 2, S. 44-50
ISSN: 2364-4737
World Affairs Online
This policy brief explores the potential scope and optimal design of national climate policies in the European climate policy context. It argues that the recent German proposal of a climate levy for electricity generators (BMWi 2015) has the potential to reconcile EU and national policies. Section 2 starts with a brief introduction into the present EU climate policy regime and the rationale of national climate policies in this framework. The bottom line is that the current setting basically justifies national targets and policies only for the sectors that are not already covered by the European emissions trading scheme (EU ETS). Section 3 discusses the deficiencies of the EU ETS which is the major reason why additional national polices for the EU ETS sectors can still be justified. Section 4 focusses on how such national policies should be designed. Section 5 takes the proposed German climate level as an interesting example of a new type of national policy and discusses how it could be optimized. Section 6 summarizes and concludes.
BASE
The European Emissions Trading Scheme for CO2 established in 2005 is the world's largest emissions trading scheme. Since it covers only some sectors of the European economies it can nevertheless not ensure that the Kyoto targets are reached at minimal cost. This paper first analyzes the conditions for cost efficiency in the current separated carbon markets accounting also for the possibilities of purchasing international carbon credits from outside the EU. A computable general equilibrium model is then used to assess the cost efficiency of current EU climate strategies. Finally, based both on the theoretical as well as the quantitative analysis, recommendations are derived for a better allocation of the reduction burden between the sectors participating in emissions trading, those that do not participate and international carbon purchases.
BASE
In: Umweltwissenschaften und Schadstoff-Forschung: UWSF ; Zeitschrift für Umweltchemie und Ökotoxikologie ; Organ des Verbandes für Geoökologie in Deutschland (VGöD) und der Eco-Informa, Band 14, Heft 4, S. 257-264
ISSN: 1865-5084
In: Kieler Arbeitspapiere 1238
he objective of this paper is to assess the likely allocation effects of the current cli-mate protection strategy as it is laid out in the National Allocation Plans (NAPs) for the European Emissions Trading Scheme (ETS). The multi-regional, multi-sectoral CGE-model DART is used to simulate the effects of the current policies in the year 2012 when the Kyoto targets need to be met. Different scenarios are simulated in or-der to highlight the effects of the grandfathering of permits to energy-intensive instal-lations, the use of the project-based mechanisms (CDM and JI), and the restriction imposed by the supplementarity criterion.
In: Kieler Arbeitspapiere 1232
In: Kiel working paper no. 1133
After the conferences in Bonn and Marrakech it is likely that international emission trading will be realized in the near future. Major influences on the permit market are the institutional detail, the participation structure and the treatment of hot air. Different scenarios do not only differ in their implications for the demand and supply of permits and thus the permit price, but also in their allocative effects. In this paper we discuss likely institutional designs for permit allocation in the hot-air economies and the use of market power and quantify the resulting effects with and without US partieipation by using the computable general equilibrium model DART
In: Environmental and resource economics
ISSN: 1573-1502
Given that the carbon price in the EU Emissions Trading System is only around 5€/tCO2 while consensus about a more stringent EU climate policy is very unlikely in the near future, we explore the potential scope and optimal design of additional national climate policies in the current EU policy framework. In particular, we suggest to implement a type of carbon price floor in the national EU ETS sectors that either allows for i) shifting emissions to non-ETS sectors like housing and transport or ii) retiring EU-wide emission allowances. In a simple theoretical framework with two countries and two sectors, we show that these two policy options are efficient up to a certain carbon price threshold. Moreover, efficiency is the highest at an optimal carbon price level equaling a weighted sum of the price differentials between ETS and non-ETS sectors. In order to determine the empirical relevance, we conduct a numerical partial equilibrium analysis of the EU carbon market in 2020. We find that Germany shows the highest potential to reduce EU-wide inefficiencies. With a price floor of 36€/tCO2 in 2020, Germany could reduce national climate policy costs by 13% if emissions are shifted from the ETS to non-ETS sectors. If they are willing to take on additional costs by retiring emission allowances, they are able to reduce EU ETS emissions by 1.6%.
BASE
In: Climate policy, Band 16, Heft 8, S. 993-1010
ISSN: 1752-7457
In: Environmental science & policy, Band 42, S. 56-66
ISSN: 1462-9011
This paper discusses the developments in the markets for CO2 emissions rights since the Kyoto Protocol has been signed. The different emission trading schemes dominated by the ETS of the European Union and the Clean Development mechanism are surveyed. These schemes will need to be incorporated in a Post-Kyoto multilateral agreement. Based on a small model the incentives among developing and developed countries for continuing or transforming the Clean Development Mechanism in the light of a stricter world wide emission control are discussed.
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