Suchergebnisse

Der EU-Emissionshandel ist für die Dekarbonisierung der Wirtschaft von zentraler Bedeutung. Denn auf dem Weg zur "Netto-Null" braucht es die richtigen Anreize, um den Wandel zu vollziehen – und die Folgen für die Bevölkerungen abzufedern. (IP)

In this article, we explain why the current climate policy mix of the European Union (EU), consisting of the EU Emissions Trading System (ETS) and overlapping policies, is incoherent with respect to emission abatement and cost-effectiveness. The concept of policy coherence guides our analysis in identifying the EU ETS' current dynamic supply adjustment mechanism, the Market Stability Reserve (MSR), to be at the heart of the shortcomings of current market design. Incoherence emerges due to the MSR's quantity-based indicator for scarcity. It only works well for current and past demand fluctuations, but not for anticipated changes in demand, e.g., caused by a member state's fossil-fuel phase-out. As a result, instead of fostering synergies as intended, the MSR undermines coherence by creating backfiring interactions and making precise predictions of overlapping policies' impacts close to impossible. Considering the European Commission's reform proposal of July 2021, we argue that a change in the MSR's parametrisation leaves the fundamental cause of incoherence unaddressed. Based on recent findings in the economics literature, we propose introducing a price-based indicator for scarcity as a solution to substantially reduce the current incoherence of the policy mix.

The final design choices for Phase IV of the EU ETS are about to be made. With the introduction of the market stability reserve several additional design parameters have been introduced into the EU ETS. This paper explores how changes in these parameters impact on allowance price paths. Four parameters are investigated. They differ substantially in whether, how and when they affect allowance prices. Finally, the proposal by the environmental committee of the European Parliament from December 2016 is projected to unambiguously increase prices at all points in time but to render the market stability reserve (almost) redundant.