Scanning the Options for a Structural Reform of the EU Emissions Trading System. CEPS Special Report 107, 19 May 2015

This paper provides a comprehensive overview and analysis of different options to reform the EU Emissions Trading System (ETS). The options discussed include changes to address the rigidity of supply on the auctioning side, as well as reforms to add flexibility to free allocation. Additionally, other options that may enhance the functionality of the EU ETS are covered, drawing on examples and practices in other carbon-pricing mechanisms around the world. It is crucial to note that any reform of the EU ETS must consist of a package of options. Taken separately, the options may very well have beneficial effects, but they would also leave intact clear imperfections in the current design. Specifically where the auctioning supply mechanism and the flexibility in free allocation are concerned, we assess multiple options in each category, and present evidence for each option. Where appropriate, we suggest complementing these reform options with additional elements (presented in section 3.3). The aim of any structural reform should be to arrive at a set of options that forms a consistent and credible package. With this paper, we provide an evidence-based assessment of the various building blocks of such a reform.

The Emission Trading Scheme reform: will the Commission's proposal save the system? EPC Policy Brief, 29 May 2015

The European Union’s Emission Trading Scheme (ETS), proposed by the Commission in 2001, entered into force in 2005. It was the flagship instrument of an ambitious policy aiming to reduce the emission of greenhouse gasses in the EU by making emission allowances a freely tradable ‘financial commodity’. However, in recent years, the cracks in the system have begun to show as the price of these CO2 emission allowances has dropped. In this Policy Brief, Jørgen Knud Henningsen argues that the envisaged ETS reform may not be enough to address the system’s shortcomings, and that there should be a more open discussion about its potential if it is to contribute to the EU’s goal of a largely de-carbonised economy by 2050.

Something Worth Fighting For: The Evolution of Lobbying Coalitions in the Emissions Trading System. Bruges Political Research Papers 50/2015.

This thesis attempts to understand who fought for influence within the European Union’s policy area of the Emissions Trading System (ETS). The ETS is a key aspect of the European Union’s (EU) climate change policy and is particularly important in light of the conclusions at the 2015 United Nations Climate Change Conference in Paris. It was first established in 2003 with Directive 2003/87/EC and completed its first major revision in 2008 with Directive 2009/29/EC. Between these two key Directives, the interplay between industrial and environmental incentives means that the ETS has created a dynamic venue for divergent interest groups. So as to identify the relevant actors, this paper applies the Advocacy Coalition Framework (ACF) of Sabatier. Using position papers, semi-structured interviews, and unpublished documents from the EU institutions, this paper answers it primary research question in its identification of an economy-first and an environment-first lobbying coalition. These coalitions have expanded over time with the environment-first coalition incorporating Greenpeace and the economy-first coalition expanding even further in both scope and speed. However, the economy-first coalition has been susceptible to industry-specific interests. In its application of the ACF, the research shows that a hypothesised effect between the ACF’s external events and these lobbying coalitions is inconclusive. Other hypotheses stemming from the ACF relating to electricity prices and the 2004 enlargement seem to be of significance for the relative composition of the lobbying coalitions. This paper finds that there are certain limitations within the ACF. The findings of this thesis provide a unique insight into how lobbying coalitions within a key EU policy area can form and develop.