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Emissions Trading, CDM, JI, and More: The Climate Strategy of the EU

Abstract:
The objective of this paper is to assess the likely allocation effects of the current climate 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 order to highlight the effects of the grandfathering of permits to energy-intensive installations, the use of the project-based mechanisms (CDM and JI), and the restriction imposed by the supplementarity criterion.

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Energy Specializations: Energy and the Environment – Climate Change and Greenhouse Gases; Energy and the Environment – Environmental Market Design; Energy and the Environment – Policy and Regulation

JEL Codes: Q54: Climate; Natural Disasters and Their Management; Global Warming, Q52: Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

Keywords: Climate change, European Emissions Trading, CGE model, DART, CDM, JI, EU.

DOI: 10.5547/ISSN0195-6574-EJ-Vol27-No2-1

Published in Volume 27, Number 2 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.

 

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