Carbon Emissions Trading and Carbon Taxes

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "Carbon Emissions Trading and Carbon Taxes"

Transcription

1 Carbon Emissions Trading and Carbon Taxes EU Environmental Policy The challenge reaching towards a low carbon economy 1

2 This presentation covers Can carbon markets be part of the answer in controlling climate change? What is the basic economics of carbon trading? Is the EU system working? What are the alternatives / complements? Should carbon trading be replaced with a carbon tax? Negative Externalities and Market Failure Price Marginal social cost (supply) Marginal private cost (supply) Efficiency Loss Marginal private benefit (demand) Social Optimal Output Private Optimal Output Quantity 2

3 EU targets: % cut in greenhouse gas emissions by 2020, compared with 1990 levelsl 20% increase in use of renewable energy by % cut in energy consumption through h improved energy efficiency i by 2020 EU-Emissions Trading Scheme ETS is a market-based mechanism to incentivise reduction of C02 emissions The scheme operates through h the allocation and trade of CO2 emissions allowances One allowance represents one ton of C02 equivalent. Long term goal - de-carbonization of EU economy Carbon trading scheme began in January Now into 2 nd phase which lasts until end

4 Supply and demand analysis for carbon trading schemes Permit Price (Euro per tonne of C02) EU Carbon Trading Market in Theory Supply 2012 Supply 2010 Price 2012 Price 2010 Demand 2012 Demand 2010 Cap 2012 Cap 2010 Quantity of Permits EU Carbon Emissions Price Source: mselect/cmenvaud/290/29002.htm 4

5 Trading the right to pollute Market failure can occur with missing markets e.g. a market in environmental property rights. Carbon trading seeks to create incentives to reduce pollution. Cap is set on the emissions - creates the scarcity required for the market At the end of each year installations are required to ensure they have enough allowances to account for their installation s actual emissions. In Phase II increased penalties imposed on any excess emissions rise to 100 per ton of CO2 Carbon Trading assets and liabilities Businesses in the EU-ETS must implement carbon management strategies in the medium term Assets: If a carbon emitting business can under-use its initial allowance by better energy efficiency, it can sell its surplus on the market. Liabilities: If a business is faced by high costs to reduce its emissions, it must buy extra allowances The new carbon market should develop a price that reflects the cheapest ways of implementing emission cutbacks. As the market price of carbon emissions rises, so there is an incentive for businesses to invest in technologies that are more pollution efficient including carbon sequestration. 5

6 Rewards and incentives? Reward efficiency e.g. those businesses that are pollution efficient Reward action e.g. capital investment in lower-carbon cleaner factories and production processes Reduce pollution without damaging the competitiveness of European businesses. The Clean Development Mechanism CDM: allows industrialized countries to invest in projects that reduce emissions in developing countries - as an alternative to what would undoubtedly be more expensive emission reduction programmes in their own country. The CDM scheme has The CDM scheme has been criticised fraudulent use of it 6

7 Weaknesses Carbon Trading as Fools Gold? Government failure? Over-allocation of quotas and national freedom to allocate Gave windfalls to some businesses Carbon price collapsed This has driven up demand for coal fired energy a dirtier fuel! (law of unintended consequences) Energy companies have found it easy to switch fuel sources as prices have changed (good example of elasticity of supply!) Politicians are unlikely to set emissions cap low enough to drive carbon prices to the right level carbon price generated by the EU ETS has so far suffered from being too low and too volatile to bring forward large-scale investment in long-term emissions cuts (House of Commons report) Recession and EU carbon prices EU recession has caused reductions in output in steel, paper, cement and glass Led to sell off of carbon credits That has led to a big drop in the market value of carbon permits (Euro13 in Feb 2010) There is less incentive for companies to stop polluting Fears for the future of many clean energy projects such as investment in bio-mass Is there a case for a minimum price on carbon emissions? Or an extra carbon tax? UK House of Commons Environmental Audit Committee said yesterday that 88 per tonne was the lowest price necessary for investment in green technologies to become economic 7

8 The recession and carbon prices Permit Price (Euro per tonne of C02) EU Carbon Trading Market in Theory Supply 2012 Supply 2010 P2012 P2010 Demand 2010 Demand 2012 Cap 2012 Cap 2010 Quantity of Permits A price floor for carbon permits? What about a minimum price for carbon? Would need EU governments to guarantee to buy any permits offered for sale at a specific price Alternative is to set a new carbon tax at the level of the desired floor price Would have to be done across the EU in order to be effective Another option is to have a minimum reserve price for auctions of carbon allowances 8

9 More videos on decarbonisation Is a carbon tax a viable alternative? 9

10 Carbon taxation A Carbon tax is a specific tax on the consumption of goods which cause carbon dioxide emissions Already in use in Denmark and Sweden (and France from Jan 2010 carbon tax set at Euro17 per ton) Case for Carbon taxation Cap and trade is like a tax so why not tax instead? Mandates a specific price on carbon less uncertainty than the emissions-trading price A way of internalizing externalities the tax would raise the marginal cost of the CO2E-emitting activities, up to the point that the marginal social cost of abatement activities is equated to the marginal social benefit from these activities Incentive for firms to lower emissions Consumers will respond perhaps in surprising ways (behavioural economics has something to say here!) Revenue generated can be ring-fenced and then recycled i.e. spent on environmental initiatives 10

11 Supporters of a carbon tax Potential problems with a carbon tax How much to tax when emissions of carbon are difficult to measure accurately? What is the true economic cost of CO2 emissions and impact on climate change? Involves discounting the future Costs of compliance / risk of tax evasion Possible regressive effects on lower income households Less certainty about the effect on quantity of emissions Countries may free ride on others carbon taxes i.e. enjoy a reduction in CO2 emissions without imposing their own tax Unless introduced across many countries would potentially damage competitiveness and jobs of countries that bring a carbon tax in Would countries be prepared to raise the carbon tax to reduce emissions? Low price elasticity of demand? Carbon taxes are vulnerable to political lobbying regulatory capture and government failure 11

12 Evaluating the alternatives When evaluating consider some of these points: 1. Which interventions are likely to be most effective? In changing behaviour In encouraging innovation and investment In reducing emissions at lowest cost 2. What are the consequences for equity? Between rich and poorer nations Between rich and poorer within any one country Between current and future generations Between producers and consumers 3. What approach offers the best chance of a global programme? 4. Putting a price on carbon is a necessary but insufficient condition for achieving the required reductions in CO2 tutor2u Keep up to date with economics, resources, quizzes and worksheets for your economics course. 12

Domestic energy bills and costs of implementing environmental measures

Domestic energy bills and costs of implementing environmental measures Domestic energy bills and costs of implementing environmental measures The Sustainable Development Commission has analysed household electricity and gas bills to show the contribution of the additional

More information

Carbon price, carbon tax and emission trading Huib van Essen (CE Delft) Focus Group Meeting 2 October 2009, European Commission

Carbon price, carbon tax and emission trading Huib van Essen (CE Delft) Focus Group Meeting 2 October 2009, European Commission Carbon price, carbon tax and emission trading Huib van Essen (CE Delft) Focus Group Meeting 2 October 2009, European Commission www.eutransportghg2050.eu 1 Overview of presentation 1. External cost of

More information

COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT. Accompanying the document

COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT. Accompanying the document EUROPEAN COMMISSION Brussels, XXX SWD(2014) 18 /2 COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a Decision of the European Parliament

More information

The Marginal Effects of the Price for Carbon Dioxide: Quantifying the Effects on the Market for Electric Generation in Florida

The Marginal Effects of the Price for Carbon Dioxide: Quantifying the Effects on the Market for Electric Generation in Florida The Marginal Effects of the Price for Carbon Dioxide: Quantifying the Effects on the Market for Electric Generation in Florida Theodore J. Kury Director of Energy Studies Public Utility Research Center

More information

2. Executive Summary. Emissions Trading Systems in Europe and Elsewhere

2. Executive Summary. Emissions Trading Systems in Europe and Elsewhere 2. Executive Summary With the introduction of CO 2 emission constraints on power generators in the European Union, climate policy is starting to have notable effects on energy markets. This paper sheds

More information

Negative Externalities. AS Economics Presentation 2005

Negative Externalities. AS Economics Presentation 2005 Negative Externalities AS Economics Presentation 2005 Key Issues The meaning of externalities Examples of negative externalities Differences between private and social costs Externalities as a cause of

More information

ELECTRICITY MARKET REFORM (EMR) & THE ENERGY BILL INENCO OVERVIEW

ELECTRICITY MARKET REFORM (EMR) & THE ENERGY BILL INENCO OVERVIEW ELECTRICITY MARKET REFORM (EMR) & THE ENERGY BILL INENCO OVERVIEW February 2014 ELECTRICITY MARKET REFORM (EMR) & THE ENERGY BILL The Energy Bill is the government s flagship energy policy. There have

More information

1.2 The CIOT s Environmental Taxes Working Group has previously commented on the principles of environmental taxes.

1.2 The CIOT s Environmental Taxes Working Group has previously commented on the principles of environmental taxes. Reforming the business energy efficiency tax landscape HM Treasury consultation document September 2015 Response by the Chartered Institute of Taxation 1 Introduction 1.1 The Chartered Institute of Taxation

More information

Addressing Competitiveness in introducing ETR United Kingdom s climate change levy

Addressing Competitiveness in introducing ETR United Kingdom s climate change levy Low Carbon Green Growth Roadmap for Asia and the Pacific CASE STUDY Addressing Competitiveness in introducing ETR United Kingdom s climate change levy Key point The UK Government introduced an energy tax

More information

The role of local, decentralised energy solutions is too often overlooked in the context of current EU policy priorities to increase energy supply

The role of local, decentralised energy solutions is too often overlooked in the context of current EU policy priorities to increase energy supply The role of local, decentralised energy solutions is too often overlooked in the context of current EU policy priorities to increase energy supply security while attaining climate change goals. This presentation

More information

Chapter 15: Externalities

Chapter 15: Externalities Chapter 15: Externalities Econ 102: Introduction to Microeconomics 1 1.1 Goals of this class Goals of this class Learn about market failure. Learn how economic decisions can negatively affect others in

More information

Regulatory Briefing. Capital Markets Day. 17 October 2013

Regulatory Briefing. Capital Markets Day. 17 October 2013 Regulatory Briefing Capital Markets Day 17 October 2013 Agenda Andrew Koss Director of Strategy Damien Speight Head Trader Renewables Obligation Contracts for Difference Levy Control Framework Capacity

More information

Methane emissions trading

Methane emissions trading 24 Chapter 3: Methane emissions trading Methane emissions trading One of the key issues in this report is whether methane trading is a viable option for the UK. Market based trading schemes are currently

More information

EU renewable energy and biofuel targets what will they mean?

EU renewable energy and biofuel targets what will they mean? EU renewable energy and biofuel targets what will they mean? Background The EU Commission has today tabled proposals for reductions in carbon dioxide emissions a 20% cut by 2020. Alongside this legally

More information

Key Solutions CO₂ assessment

Key Solutions CO₂ assessment GE Capital Key Solutions CO₂ assessment CO₂ emissions from company car fleets across Europe s major markets between 2008 and 2010 www.gecapital.eu/fleet Contents Introduction and key findings Reduction

More information

Energy Productivity & Pricing

Energy Productivity & Pricing Energy Productivity & Pricing Markets for energy, renewable energy and carbon Dr Jenny Riesz February 2014 2 Average electricity retail prices Electricity price rises CSIRO Future Grid (2013) Change and

More information

THE UK CLIMATE CHANGE PROGRAMME AND EXAMPLES OF BEST PRACTICE. Gabrielle Edwards United Kingdom

THE UK CLIMATE CHANGE PROGRAMME AND EXAMPLES OF BEST PRACTICE. Gabrielle Edwards United Kingdom Workshop on Best Practices in Policies and Measures, 11 13 April 2000, Copenhagen THE UK CLIMATE CHANGE PROGRAMME AND EXAMPLES OF BEST PRACTICE Gabrielle Edwards United Kingdom Abstract: The UK published

More information

Interview: Aurélie Faure, Financial Analyst at Dexia Asset Management

Interview: Aurélie Faure, Financial Analyst at Dexia Asset Management Research letter n 09/03 October 2009 http://www.carbonium.fr/pdf/research0903.pdf CONTENTS Interview: Aurélie Faure, Financial Analyst at Dexia Asset Management... p. 1 Hot topics in Copenhagen... p. 3

More information

AP Microeconomics Chapter 5 Outline

AP Microeconomics Chapter 5 Outline I. Learning Objectives In this chapter students should learn: A. How to differentiate demand side market failures and supply side market failures. B. The origin of consumer surplus and producer surplus,

More information

1 What is the EU Emissions Trading Scheme, and how does it work? 2 Why is the EU proposing to include aviation into the EU ETS?

1 What is the EU Emissions Trading Scheme, and how does it work? 2 Why is the EU proposing to include aviation into the EU ETS? Q&A: Aviation and the EU Emissions Trading Scheme 1 What is the EU Emissions Trading Scheme, and how does it work? Under the UN Kyoto Protocol, industrialised nations are required to reduce the amount

More information

a) Policies to achieve efficient resource allocation and correct market failure Indirect Taxes CIE A-level Economics

a) Policies to achieve efficient resource allocation and correct market failure Indirect Taxes CIE A-level Economics a) Policies to achieve efficient resource allocation and correct market failure Indirect Taxes Indirect taxes are imposed by the government and they increase production costs for producers. Therefore,

More information

Chapter 6 Impacts of global warming

Chapter 6 Impacts of global warming Chapter 6 Impacts of global warming Introduction This chapter compromises a set of activities, which focus on the reasons for and the consequences of global warming and ways of preventing it. The activities

More information

Role of Natural Gas in a Sustainable Energy Future

Role of Natural Gas in a Sustainable Energy Future Role of Natural Gas in a Sustainable Energy Future Alexander Medvedev, Deputy Chairman of Gazprom Management Committee, Director General of Gazprom Export 2 nd Ministerial Gas Forum Doha, 30 November 2010

More information

Part 3 Exercise 2: Trading on the Stalk Market. Focus Question How does carbon trading work?

Part 3 Exercise 2: Trading on the Stalk Market. Focus Question How does carbon trading work? Part 3 Exercise 2: Trading on the Stalk Market Focus Question How does carbon trading work? Performance Tasks Students will be able to explain the basics of carbon trading. Students will be able to describe

More information

02 GLOBAL EMISSIONS EMISSIONS. Areport by the Netherlands Environmental Assessment Agency says global CO2 emissions have increased 3.

02 GLOBAL EMISSIONS EMISSIONS. Areport by the Netherlands Environmental Assessment Agency says global CO2 emissions have increased 3. 2 GLOBAL 1, Tughlakabad Institutional Area, New Delhi 11 62, INDIA Ph: +91-11-2995611-5 - 639-6399 Fax: +91-11-2995579 Areport by the Netherlands Environmental Assessment Agency says global CO2 emissions

More information

A Comparison of the Costs of Alternative Policies for Reducing UK Carbon Emissions. Europe Economics Report for Open Europe

A Comparison of the Costs of Alternative Policies for Reducing UK Carbon Emissions. Europe Economics Report for Open Europe A Comparison of the Costs of Alternative Policies for Reducing UK Carbon Emissions Europe Economics Report for Open Europe Europe Economics Chancery House 53-64 Chancery Lane London WC2A 1QU Tel: (+44)

More information

Exam 1 Spring 2006 Version G Solution

Exam 1 Spring 2006 Version G Solution Peter J. Wilcoxen Economics 410 Exam 1 Spring 2006 Version G Solution The Maxwell School Syracuse University Part 1: Single Source Pollution (20 points) Suppose that electricity can be produced by nuclear

More information

Externality Essentials P E Q E

Externality Essentials P E Q E Micro Externality Essentials If it ain t broke, don t fix it consider our standard supply and demand diagram below note the size of the shaded economic surplus generated if we allow the market to O reach

More information

N. Gregory Mankiw Principles of Economics. Chapter 10. EXTERNALITIES

N. Gregory Mankiw Principles of Economics. Chapter 10. EXTERNALITIES N. Gregory Mankiw Principles of Economics Chapter 10. EXTERNALITIES Solutions to Problems and Applications 1. The Club conveys a negative externality on other car owners because car thieves will not attempt

More information

Proposal of Upstream Emissions Trading in Japan

Proposal of Upstream Emissions Trading in Japan OECD GLOBAL FORUM ON SUSTAINABLE DEVELOPMENT: EMISSIONS TRADING CONCERTED ACTION ON TRADEABLE EMISSIONS PERMITS COUNTRY FORUM OECD Headquarters, Paris 17-18 March, 2003 Proposal of Upstream Emissions Trading

More information

MEMORANDUM. TO: Greenpeace FROM: Point Carbon DATE: 9/10/09

MEMORANDUM. TO: Greenpeace FROM: Point Carbon DATE: 9/10/09 MEMORANDUM TO: Greenpeace FROM: Point Carbon DATE: 9/10/09 SUBJ: Waxman-Markey (ACES 2009) Project Report Findings: As a whole, Coal receives significant financial funding under the allowance allocation

More information

Topic 2: Fossil Fuel Supply and Demand: Effect of Subsidies and Taxation. () Global Energy Issues, Industries and Markets 1 / 53

Topic 2: Fossil Fuel Supply and Demand: Effect of Subsidies and Taxation. () Global Energy Issues, Industries and Markets 1 / 53 Topic 2: Fossil Fuel Supply and Demand: Effect of Subsidies and Taxation () Global Energy Issues, Industries and Markets 1 / 53 Introduction This topic follows strategy I plan in using in this course A

More information

EU energy and climate policies beyond 2020

EU energy and climate policies beyond 2020 EU energy and climate policies beyond 2020 Policy recommendations EU s energy and climate change policies are in need of reform. They need to be consistent, simplified and set to drive European competitiveness.

More information

Economic & Administrative Considerations for the Initial Distribution of Emissions Allowances. Dallas Burtraw Resources for the Future

Economic & Administrative Considerations for the Initial Distribution of Emissions Allowances. Dallas Burtraw Resources for the Future Economic & Administrative Considerations for the Initial Distribution of Emissions Allowances Dallas Burtraw Resources for the Future Initial Distribution of New Asset Value Rate approach implicitly assigns

More information

Supporting Carbon Capture and Storage through Policy and Regulation: UK approach 22 April 2015

Supporting Carbon Capture and Storage through Policy and Regulation: UK approach 22 April 2015 Supporting Carbon Capture and Storage through Policy and Regulation: UK approach 22 April 2015 UK Position Most active country in EU on CCS One of the best policy environments for CCS in the world (GCCSI)

More information

A Guide to Woodland Carbon for Business

A Guide to Woodland Carbon for Business A Guide to Woodland Carbon for Business Contents: 1. Investing in Woodland Carbon: an overview 2. Why Woodland Carbon? 3. How much does it cost? 4. Woodland Carbon Code 5. Woodland Carbon compliance 6.

More information

Carbon Pricing Experience in California. Brian Turner California Public Utilities Commission May 22, 2014

Carbon Pricing Experience in California. Brian Turner California Public Utilities Commission May 22, 2014 Carbon Pricing Experience in California Brian Turner California Public Utilities Commission May 22, 2014 AB 32: Global Warming Solutions Act of 2006 Reduce emissions to 1990 level by 2020 Maximize environmental/

More information

IEAGHG Information Paper: 2015-IP29; Emissions Performance Standards For or Against

IEAGHG Information Paper: 2015-IP29; Emissions Performance Standards For or Against IEAGHG Information Paper: 2015-IP29; Emissions Performance Standards For or Against Both the USA and Canada have recently regulated emissions from fossil fuel fired power plants using Emission Performance

More information

Evaluating the Affordability of EMR Policies: Achieving UK Carbon Reduction Targets at the Lowest Cost-Per-Tonne

Evaluating the Affordability of EMR Policies: Achieving UK Carbon Reduction Targets at the Lowest Cost-Per-Tonne Evaluating the Affordability of EMR Policies: Achieving UK Carbon Reduction Targets at the Lowest Cost-Per-Tonne Meg Gottstein, Principal The Regulatory Assistance Project Green Alliance Electricity Market

More information

Maximising recycling rates tackling residuals

Maximising recycling rates tackling residuals September 2002 Briefing Maximising recycling rates tackling residuals Background Friends of the Earth is an international organisation with over 70 member groups across the World. The majority of these

More information

Economics. Externalities. In this chapter, look for the answers to these questions: Introduction. N. Gregory Mankiw

Economics. Externalities. In this chapter, look for the answers to these questions: Introduction. N. Gregory Mankiw C H A P T E R 10 Externalities P R I N C I P L E S O F Economics N. Gregory Mankiw Premium PowerPoint Slides by Ron Cronovich 2009 South-Western, a part of Cengage Learning, all rights reserved In this

More information

The cogeneration in the EU ceramic industry

The cogeneration in the EU ceramic industry Annual Conference 2013 The cogeneration in the EU ceramic industry Renaud Batier, Cerame-Unie 8 sectors 28 billion Europe s ceramic industry 25% sold outside of the EU 200,000 direct jobs in all European

More information

TECHNICAL SUPPORT DOCUMENT AMENDMENTS TO COMAR 26.09. MD CO 2 Budget Trading Program FOR JULY 26, 2013 PREPARED BY:

TECHNICAL SUPPORT DOCUMENT AMENDMENTS TO COMAR 26.09. MD CO 2 Budget Trading Program FOR JULY 26, 2013 PREPARED BY: TECHNICAL SUPPORT DOCUMENT FOR AMENDMENTS TO COMAR 26.09 MD CO 2 Budget Trading Program JULY 26, 2013 PREPARED BY: MARYLAND DEPARTMENT OF THE ENVIRONMENT 1800 Washington Boulevard Baltimore Maryland 21230

More information

Perman et al.: Ch. 6. Pollution control: instruments

Perman et al.: Ch. 6. Pollution control: instruments Perman et al.: Ch. 6 Pollution control: instruments Outline of lecture [Previous: Ch. 5. What is the socially optimal pollution level?] Ch. 6. Pollution control instruments Focus on cost-effectiveness

More information

English summary. Chapter I: Energy and Climate Policy

English summary. Chapter I: Energy and Climate Policy The present report from the Chairmen of the Danish Council of Environmental Economics contains the following three chapters: - Energy and Climate Policy, chapter I - Car taxation, accidents and environment,

More information

TWO WAYS TO PRICE CARBON POLLUTION. Waxman/Markey Cap & Dividend

TWO WAYS TO PRICE CARBON POLLUTION. Waxman/Markey Cap & Dividend TWO WAYS TO PRICE CARBON POLLUTION Waxman/Markey Cap & Dividend WHY CARBON PRICING AND HOW IT S DONE MATTER GREATLY We can t stop climate change unless we raise the cost (currently zero) of dumping carbon

More information

BACKGROUNDER. Emissions Trading versus CO 2 Taxes. Ian W.H. Parry and William A. Pizer. May 2007

BACKGROUNDER. Emissions Trading versus CO 2 Taxes. Ian W.H. Parry and William A. Pizer. May 2007 BACKGROUNDER May 2007 Emissions Trading versus CO 2 Taxes Ian W.H. Parry and William A. Pizer 1616 P Street NW Washington DC 20036 202-328-5000 www.rff.org Contents Overview... 1 Similarities between CO

More information

Adrien Vogt-Schilb Banco Mundial

Adrien Vogt-Schilb Banco Mundial Adrien Vogt-Schilb Banco Mundial q Motivation A lot of talk about climate stabilization but limited awareness of implications Planning targeted to the medium term Debate focusing on what should be done

More information

District Heating & Cooling

District Heating & Cooling District Heating & Cooling a VISION towards 2020 2030-2050 Vision by the DHC+ Technology Platform Steering Committee Presented by: M.Sc. Jan Eric Thorsen Senior Project Manager Danfoss District i t Heating

More information

Critical Policy Options to Protect Industry Competitiveness

Critical Policy Options to Protect Industry Competitiveness Critical Policy Options to Protect Industry Competitiveness Graham Weale Chief Economist, RWE AG IEA Energy Business Council Meeting, Paris 4 th June 2013 RWE Group a leading European energy utility >

More information

The UK Emissions Trading Scheme auction

The UK Emissions Trading Scheme auction The UK Emissions Trading Scheme auction Stephen Smith UCL EU ETS Auction Workshop University of Cambridge, 12 January 2007 UK Emissions Trading Scheme UK ETS began March 2002. World s first large-scale

More information

European Emissions Trading Scheme The German Experience

European Emissions Trading Scheme The German Experience European Emissions Trading Scheme The German Experience Energy Community 8th Environmental Task Force Meeting Vienna, 15 October 2014 Angelika Smuda Emissions Trading Division Federal Ministry for the

More information

Success story: Feed-In Tariffs Support renewable energy in Germany

Success story: Feed-In Tariffs Support renewable energy in Germany Success story: Feed-In Tariffs Support renewable energy in Germany This document will show how this success story has been brought about and is made up of the following sections: 1. What is a Feed-In Tariff?

More information

- 1 - UNITED NATIONS FRAMEWORK CONVENTION ON CLIMATE CHANGE. Note by the International Maritime Organization

- 1 - UNITED NATIONS FRAMEWORK CONVENTION ON CLIMATE CHANGE. Note by the International Maritime Organization - 1 - UNITED NATIONS FRAMEWORK CONVENTION ON CLIMATE CHANGE Note by the International Maritime Organization Ad-Hoc Working Group on Long-term Cooperative Action under the Convention Fourteenth session,

More information

Government intervention

Government intervention Government intervention Explain the term free market. In a free market, governments stand back and let the forces of supply and demand determine price and output. There is no direct (eg regulations) or

More information

Chapter 17. The Economics of Pollution Control

Chapter 17. The Economics of Pollution Control Chapter 17 The Economics of Pollution Control Economic Rationale for Regulating Pollution Pollution as an Externality -pollution problems are classic cases of a negative externality -the MSC of production

More information

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. ECN 202 Midterm 2 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) When a sales tax is imposed on sellers, the supply curve shifts so that the vertical

More information

CO 2 taxes and emission trading in Norway. Nordic seminar Tokyo 18. juni 2010 Frode Finsås Ministry of Finance, Norway

CO 2 taxes and emission trading in Norway. Nordic seminar Tokyo 18. juni 2010 Frode Finsås Ministry of Finance, Norway CO 2 taxes and emission trading in Norway Nordic seminar Tokyo 18. juni 2010 Frode Finsås Ministry of Finance, Norway 1 Outline of the presentation 1. Climate instruments by source 2. The CO2-tax 3. The

More information

Paper P5. Advanced Performance Management. Thursday 4 December 2014. Professional Level Options Module

Paper P5. Advanced Performance Management. Thursday 4 December 2014. Professional Level Options Module Professional Level Options Module Advanced Performance Management Thursday 4 December 2014 Time allowed Reading and planning: Writing: 15 minutes 3 hours This paper is divided into two sections: Section

More information

Share of global GHG emissions. GHG emissions per capita. (tco 2. e/cap)

Share of global GHG emissions. GHG emissions per capita. (tco 2. e/cap) CLIMATE ACTION TRACKER BROWN TO GREEN: G2 TRANSITION TO A LOW CARBON ECONOMY Indonesia This country profile assesses Indonesia s past, present and indications of future performance towards a low-carbon

More information

World Bank. International Review of Trading Schemes for Energy Saving, Carbon Reduction and Renewable Energy

World Bank. International Review of Trading Schemes for Energy Saving, Carbon Reduction and Renewable Energy International Review of Trading Schemes for Energy Saving, Carbon Reduction and Renewable Energy World Bank Mark Johnson mark.johnson@ricardo-aea.com July 2013 Project objectives Chinese Government is

More information

An Economy-Wide Carbon Tax: Implications for Commercial Buildings

An Economy-Wide Carbon Tax: Implications for Commercial Buildings An Economy-Wide Carbon Tax: Implications for Commercial Buildings MARILYN B R OWN MATT C OX XIAOJING SUN N OVEMBER 2 9, 2 0 11 Table of Contents Federal Policy Option: An Economy-Wide Carbon Tax Experience

More information

Ensuring Competitiveness. under a US Carbon Tax

Ensuring Competitiveness. under a US Carbon Tax Ensuring Competitiveness under a US Carbon Tax As policymakers express renewed interest in a carbon tax, Carolyn Fischer, Richard Morgenstern, and Nathan Richardson weigh three options for preventing business

More information

HMT Consultation Reforming the business energy efficiency tax landscape: Response from the Energy Intensive Users Group

HMT Consultation Reforming the business energy efficiency tax landscape: Response from the Energy Intensive Users Group HMT Consultation Reforming the business energy efficiency tax landscape: Response from the Energy Intensive Users Group General comments The Energy Intensive Users Group (EIUG) represents manufacturing

More information

Considering a US Carbon Tax

Considering a US Carbon Tax Considering a US Carbon Tax Frequently Asked Questions Have questions about a carbon tax? Researchers in RFF s Center for Climate and Electricity Policy have the answers. Marie Bertrand/Corbis For the

More information

AN ANALYSIS OF THE OBSTACLES TO INCLUSION OF ROAD TRANSPORT EMISSIONS IN THE EUROPEAN UNION S EMISSIONS TRADING SCHEME

AN ANALYSIS OF THE OBSTACLES TO INCLUSION OF ROAD TRANSPORT EMISSIONS IN THE EUROPEAN UNION S EMISSIONS TRADING SCHEME AN ANALYSIS OF THE OBSTACLES TO INCLUSION OF ROAD TRANSPORT EMISSIONS IN THE EUROPEAN UNION S EMISSIONS TRADING SCHEME Final Report: Commissioned by the Viennese based NGO Mobility for the Future or VCOE.

More information

Contents. Bibliografische Informationen digitalisiert durch

Contents. Bibliografische Informationen  digitalisiert durch Chapter 1 Energy Use and Carbon Dioxide Emissions 1 1.1 Characteristics of world energy use 2 1.1.1 Energy is an important driver of socio-economic development- -2 1.1.2 World energy intensity decreases

More information

Overview of the U.S. Market for Green Certificates. Presentation for the ERRA Licensing/Competition Committee June 11, 2013

Overview of the U.S. Market for Green Certificates. Presentation for the ERRA Licensing/Competition Committee June 11, 2013 Overview of the U.S. Market for Green Certificates Presentation for the ERRA Licensing/Competition Committee June 11, 2013 1 Topics Compliance Renewable Energy Certificate Markets: Renewable Energy Portfolio

More information

Climate change: Everyone s business

Climate change: Everyone s business Climate change: Everyone s business A summary report from the CBI Climate Change Task Force November 2007 Copyright CBI 2007 The content may not be copied, distributed, reported or dealt with in whole

More information

PUBLIC GOODS AND EXTERNALITIES

PUBLIC GOODS AND EXTERNALITIES PUBLIC GOODS AND EXTERNALITIES I. PRIVATE GOODS a. PRIVATE GOODS are produced through the competitive market system. They encompass the full range of goods available to the consumer in stores and shops

More information

Micro Externalities WCC P E Q Q

Micro Externalities WCC P E Q Q Micro Externalities WCC If it ain t broke, don t fix it consider our standard supply and demand diagram below note the size of the shaded economic surplus generated if we allow the market to reach its

More information

sustainable gains in energy policy. While the report addresses energy policies comprehensively, the following sections highlight these three topics.

sustainable gains in energy policy. While the report addresses energy policies comprehensively, the following sections highlight these three topics. EXECUTIVE SUMMARY 01 A small, somewhat isolated country, Finland takes a balanced view of its energy policy, taking advantage of its situation wherever possible. Where it can leverage its location and

More information

Foratom event 29 April 2015

Foratom event 29 April 2015 Foratom event 29 April 2015 New nuclear in the UK and Electricity Market Reform Colin Parker Head of European Liaison - EDF Energy 1 April 2015 EDF Energy plc. All rights reserved. EDF Energy A UK energy

More information

Status of China s regional trading programs: progress and challenge

Status of China s regional trading programs: progress and challenge Status of China s regional trading programs: progress and challenge Fei TENG Institute of Energy, Environment and Economy, Tsinghua University 2013 Aug 13-15 Contents Background Pilot project at local

More information

European Commission Public Consultation on GENERATION ADEQUACY, CAPACITY MECHANISMS AND THE INTERNAL MARKET IN ELECTRICITY

European Commission Public Consultation on GENERATION ADEQUACY, CAPACITY MECHANISMS AND THE INTERNAL MARKET IN ELECTRICITY February 2013 European Commission Public Consultation on GENERATION ADEQUACY, CAPACITY MECHANISMS AND THE INTERNAL MARKET IN ELECTRICITY Reply from NASDAQ OMX The NASDAQ OMX Group, Inc. delivers trading,

More information

Electricity Market Reform

Electricity Market Reform 2016 Electricity Market Reform Background The Electricity Market Reform (EMR) was issued by the UK government as a potential solution to the nation s core energy problems which include; keeping energy

More information

DRAFT REGULATIONS: CARBON OFFSETS. 20 June 2016

DRAFT REGULATIONS: CARBON OFFSETS. 20 June 2016 DRAFT REGULATIONS: CARBON OFFSETS 20 June 2016 DRAFT CARBON TAX BILL: PUBLICATION OF PROPOSED REGULATIONS MADE IN TERMS OF CLAUSE 20(b) OF THE DRAFT CARBON TAX BILL, 2015 Proposed regulations in terms

More information

Electricity Market Reform: Proposals for Implementation

Electricity Market Reform: Proposals for Implementation EMR Programme Team Department of Energy & Climate Change 4 th Floor Area D 3 Whitehall Place London SW1A 2AW 23 rd December 2013 Dear Sirs, Electricity Market Reform: Proposals for Implementation I am

More information

A Carbon Price for Colorado

A Carbon Price for Colorado A Carbon Price for Colorado What might work, what doesn t? How much can it do? How would it work? Zane Selvans, PhD Assistant Research Director Clean Energy Action @ZaneSelvans and @ClnEnergyAction A Carbon

More information

Presentation in the 2 nd International Energy Conference Power Options for the Eastern Mediterranean Region POEM 2013

Presentation in the 2 nd International Energy Conference Power Options for the Eastern Mediterranean Region POEM 2013 Presentation in the 2 nd International Energy Conference Power POEM 2013 Technical and feasibility analysis of gasoline and natural gas fuelled vehicles by Dr Charalambos A. Chasos, Prof. G.N. Karagiorgis

More information

Western Nevada County Biomass Utilization Feasibility Project. Frequently Asked Questions

Western Nevada County Biomass Utilization Feasibility Project. Frequently Asked Questions Western Nevada County Biomass Utilization Feasibility Project Frequently Asked Questions Q: What is woody biomass and where does it come from? A: Woody biomass for the Nevada County project will primarily

More information

Ementor ASA Carbon Footprint Analysis 2007

Ementor ASA Carbon Footprint Analysis 2007 Ementor ASA Carbon Footprint Analysis 2007 Key figures Ementor Group 2007 The Carbon Footprint Analysis is part of Ementor ASA s corporate efforts on becoming an environmentally conscious service provider.

More information

White Certificates Trading, Green Certificates Trading, Emission Trading Which One to Choose?

White Certificates Trading, Green Certificates Trading, Emission Trading Which One to Choose? White Certificates Trading, Green Certificates Trading, Emission Trading Which One to Choose? Dr. Xiaodong Wang, EASCS September 11, 2013 Structure of the Presentation Context: Chinese government s commitment

More information

A sustainable energy and climate policy for the environment, competitiveness and long-term stability

A sustainable energy and climate policy for the environment, competitiveness and long-term stability 2009-02-05 A sustainable energy and climate policy for the environment, competitiveness and long-term stability The party leaders of Alliance for Sweden entered into an agreement today on a long-term,

More information

New Zealand Emissions Trading Scheme Review 2015/16 Discussion Document and Call for Written Submissions

New Zealand Emissions Trading Scheme Review 2015/16 Discussion Document and Call for Written Submissions 18 February 2016 Ms Eva Murray NZ ETS Review Consultation Ministry for the Environment PO Box 10362 WELLINGTON 6143 11 Chews Lane PO Box 10568 The Terrace Wellington 6143 New Zealand Genesis Energy Limited

More information

C H A P T E R 18 Externalities and. Public Goods CHAPTER OUTLINE

C H A P T E R 18 Externalities and. Public Goods CHAPTER OUTLINE C H A P T E R 18 Externalities and Public Goods CHAPTER OUTLINE 18.1 Externalities 18.2 Ways of Correcting Market Failure 18.3 Stock Externalities 18.4 Externalities and Property Rights 18.5 Common Property

More information

Carbon Fat Cat companies in Belgium

Carbon Fat Cat companies in Belgium BRIEFING PAPER NOVEMBER 2012 Carbon Fat Cat companies in Belgium Bending the carbon rules in the heart of Europe The EU emissions trading scheme (ETS) is a agship climate policy of the European Union.

More information

Addressing Carbon Emissions: The UK s experience

Addressing Carbon Emissions: The UK s experience Addressing Carbon Emissions: The UK s experience December 2006 Overview of Seminar STERN Review on Economics of Climate Change UK climate change targets and policies The European Union emissions trading

More information

THE FUTURE OF THE SCHOOL BUS

THE FUTURE OF THE SCHOOL BUS THE FUTURE OF THE SCHOOL BUS INTRODUCTION School buses across the country bring 24 million students to school every day. 1 They are a constant presence in our children s lives, and yet they have scarcely

More information

Introduction. Introduction. Chapter 5: Externalities Problems and Solutions. Outline

Introduction. Introduction. Chapter 5: Externalities Problems and Solutions. Outline Outline Chapter 5: Externalities Problems and Solutions Externality theory Private solutions Public solutions Focus on prices or focus on quantities? A couple problems Introduction Externalities arise

More information

Regional Greenhouse Gas Initiative (RGGI; Reggie ) Will Space Massachusetts Department of Environmental Protection Mexico City May 8 9 2014

Regional Greenhouse Gas Initiative (RGGI; Reggie ) Will Space Massachusetts Department of Environmental Protection Mexico City May 8 9 2014 Regional Greenhouse Gas Initiative (RGGI; Reggie ) Will Space Massachusetts Department of Environmental Protection Mexico City May 8 9 2014 Climate Change: Massachusetts Impacts Source: UCS, 2007 Rising

More information

Summary of the Impact assessment for a 2030 climate and energy policy framework

Summary of the Impact assessment for a 2030 climate and energy policy framework Summary of the Impact assessment for a 2030 climate and energy policy framework Contents Overview a. Drivers of electricity prices b. Jobs and growth c. Trade d. Energy dependence A. Impact assessment

More information

Climate change policies and the UK business sector: Overview, impacts & suggestions for reform

Climate change policies and the UK business sector: Overview, impacts & suggestions for reform Climate change policies and the UK business sector: Overview, impacts & suggestions for reform Authors: Samuela Bassi, Antoine Dechezleprêtre & Sam Fankhauser Grantham Research Institute on Climate Change

More information

UNCLASSIFIED. Speech by Ambassador Paul Johnston to IVA seminar on lessons from the UK energy market,

UNCLASSIFIED. Speech by Ambassador Paul Johnston to IVA seminar on lessons from the UK energy market, Speech by Ambassador Paul Johnston to IVA seminar on lessons from the UK energy market, 18th March 2015 Energy has come to the forefront of European policy debates, both as a Prosperity and Security issue.

More information

District Heating in Denmark

District Heating in Denmark District Heating in Denmark - 2 questions and 5 answers on how to promote cost-effective DH nationwide Ole Odgaard Senior Advisor Delegation from France - 13 September 2016 Facts on Danish District Heating

More information

Climate change policies and the UK business sector: Overview, impacts & suggestions for reform

Climate change policies and the UK business sector: Overview, impacts & suggestions for reform Climate change policies and the UK business sector: Overview, impacts & suggestions for reform Authors: Samuela Bassi, Antoine Dechezleprêtre & Sam Fankhauser Grantham Research Institute on Climate Change

More information

Overview of UK Carbon Pricing Policies

Overview of UK Carbon Pricing Policies Partnership for Market Readiness PA11 Overview of UK Carbon Pricing Policies Paul van Heyningen, Department of Energy & Climate Change 10 March 2015 UK approach to emissions reduction Set legally binding

More information

Alternatives to Traditional Regulation

Alternatives to Traditional Regulation Alternatives to Traditional Regulation Building capacity for RIA in South Africa Presentation to Officials 27 May 2009 Michael Goldblatt Director Palmer Development Group Session 6. Regulatory Alternatives

More information

Exam Prep Questions and Answers

Exam Prep Questions and Answers Exam Prep Questions and Answers Instructions: You will have 75 minutes for the exam. Do not cheat. Raise your hand if you have a question, but continue to work on the exam while waiting for your question

More information

Climate Change 101. Cap and Trade

Climate Change 101. Cap and Trade Climate Change 101 Cap and Trade There are a variety of policy tools to reduce the greenhouse gas emissions responsible for climate change. This installment of the Climate Change 101 series explains how

More information