You'd better bet on the ETS. Bruegel Policy Brief 2013/02, April 2013

The issue: The European Union's emissions trading system (ETS), introduced in 2005, is the centerpiece of EU decarbonisation efforts and the biggest emissions trading scheme in the world. After a peak in May 2008, the price of ETS carbon allowances started to collapse, and industry, civil society and policymakers began to think about how to ‘repair the ETS’. However, the ETS is an effective and efficient tool to mitigate greenhouse gas emissions, and although prices have not been stable, it has evolved to cover more sectors and greenhouse gases, and to become more robust and less distorting. Prices are depressed because of an interplay of fundamental factors and a lack of confidence in the system. Policy challenge The ETS must be stabilised by reinforcing the credibility of the system so that the use of existing low-carbon alternatives (for example burning gas instead of coal) is incentivised and investment in low-carbon assets is ensured. Further-more, failure to reinvigorate the ETS might compromise the cost-effective synchronisation of European decarbonisation efforts across sectors and countries. To restore credibility and to ensure long-term commitment to the ETS, the European Investment Bank should auction guarantees on the future emission allowance price.This will reduce the risk for low-carbon investments and enable stabilisation of the ETS until a compromise is found on structural measures to reinforce it in order to achieve the EU's long-term decarbonisation targets.

Climate Conundrums at High Altitude. EU Diplomacy Paper 01/2014, January 2014

The European Union (EU) was the frontrunner for the establishment of the world’s first multinational emissions trading scheme (ETS). Committed to combating climate change, the EU sought to overcome the multilateral paralysis within the International Civil Aviation Organization (ICAO) to mitigate aviation emissions. Unsuccessful in pushing for a global market-based measure (MBM) within the organisation, the EU was ready for take-off to include the sector in the EU emissions trading system (EU ETS). The geographical scope, however, including all flights from and to Europe in their entire trajectory, caused frictions with the international community about sovereignty issues. Ultimately, Climate Commissioner Connie Hedegaard announced a ‘stop-the-clock’ for international flights, a temporary derogation until the 2013 ICAO Assembly in order to find a global agreement. The ’stop-the-clock’ initiative provides ample opportunity to analyse EU leadership in curbing aviation emissions based on an analytical framework specifying different types of leadership. Its shows the global challenge to the EU’s claim of structural leadership on various levels in and beyond ICAO. The paper aims to analyse to what extent the EU is a global leader in mitigating aviation emissions and to identify the kind of EU leadership according to a threefold analytical framework. In addition, it will factor in the 'stop-the-clock' initiative and to what extent it altered the perception of EU leadership in the field. The paper comes to the conclusion that EU leadership in mitigating aviation emissions is not stalling. On the contrary, the EU, by pursuing the extension of the EU ETS, has put aviation emissions on everybody’s radar – and thus showed idea-based leadership. Proving the scheme’s feasibility further underlined EU leadership, in the form of directional leadership. The 'stop-the-clock' decision, however, already indicated what was later on confirmed in the 38th ICAO Assembly: Unilateral structural leadership of the EU in the field of aviation emissions is not credible at the moment.

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 case for a European unemployment benefit scheme. CEPS Commentary, 19 May 2015

In this CEPS Commentary, Ilaria Maselli and Miroslav Beblavý argue that the European economic governance system needs to be equipped with a supranational automatic stabiliser that would kick-in automatically in the event of an economic downturn, to avoid unduly burdening national public finances. In their view, the option of creating an unemployment benefit system for the euro area should be given serious consideration. The possible variations of such a system and their implications will be the subject of in-depth study at CEPS over the coming year.

Emissziós jogok közgazdasági relevanciája és számviteli leképezése (Economic relevancy and accounting mapping of emission rights)

A cikk bemutatja, hogy az emissziós jogok mérleg- és beszámoló-képességi kritériumai milyen leképezést tesznek lehetővé a jelenleg érvényes Nemzetközi Pénzügyi Beszámolási Standardokban (IFRS, International Financial Reporting Standards). A vizsgálat fókuszában az üzemeltető áll, aki az Európai Unió kibocsátás-kereskedelmi rendszerének hatálya alá tartozik, azaz ipari tevékenysége folytán szén-dioxiddal szennyezi a Föld légterét. Az üzemeltető mint az emissziós jog tulajdonosa jelenik meg. A cikk megvizsgálja mindazokat a folyamatokat, melynek eredményeképpen birtokolhatja ezeket az egységeket, valamint azt, hogy az IFRS-ek milyen lehetőséget nyújtanak a különböző forrásból származó jogosultságok értékelésére. / === / The author presents that accounting and report ability criteria of the emission rights what mapping allows in the current International Financial Standards. The study focuses on the operator, who is the subject of the European Union Emissions Trading Scheme, whose industrial activities pollute with carbon dioxide to the earth’s atmosphere. The operator, as the owner of emission rights is displayed. This article examines those processes, which resulted in these units may be owned, and that what possibility is provided by IFRSs to evaluate rights from different sources.

Un modello forward-backward per i certificati verdi nel mercato EU ETS

In questa tesi viene presentato un modello stocastico forward-backward per la valutazione dei certificati verdi nel mercato EU ETS (European Union Emissions Trading Scheme). Anzitutto si spiega l’origine di tale mercato, per poi descriverne il funzionamento e lo scopo. Vengono, quindi, introdotte le equazioni differenziali stocastiche backward lineari, per le quali si mostra un risultato di esistenza e unicità della soluzione. Conseguentemente vengono inquadrati matematicamente i sistemi differenziali stocastici forward-backward, mostrando una loro applicazione nell’ambito del option pricing. Viene quindi derivato il modello forward-backward per la valutazione delle quote di emissione. Il prezzo dei certificati verdi è trovato come soluzione di un’equazione differenziale alle derivate parziali semilineare. L'ultima parte è dedicata all’analisi numerica di tale PDE. Infine viene trattata la valutazione di opzioni europee scritte sulle quote di emissione.

The Committee on Climate Change: A policy analysis

Domestic action on climate change is increasingly important in the light of the difficulties with international agreements and requires a combination of solutions, in terms of institutions and policy instruments. One way of achieving government carbon policy goals may be the creation of an independent body to advise, set or monitor policy. This paper critically assesses the Committee on Climate Change (CCC), which was created in 2008 as an independent body to help move the UK towards a low carbon economy. We look at the motivation for its creation in terms of: information provision, advice, monitoring, or policy delegation. In particular we consider its ability to overcome a time inconsistency problem by comparing and contrasting it with another independent body, the Monetary Policy Committee of the Bank of England. In practice the Committee on Climate Change appears to be the ‘inverse’ of the Monetary Policy Committee, in that it advises on what the policy goal should be rather than being responsible for achieving it. The CCC incorporates both advisory and monitoring functions to inform government and achieve a credible carbon policy over a long time frame. This is a similar framework to that adopted by Stern (2006), but the CCC operates on a continuing basis. We therefore believe the CCC is best viewed as a "Rolling Stern plus" body. There are also concerns as to how binding the budgets actually are and how the budgets interact with other energy policy goals and instruments, such as Renewable Obligation Contracts and the EU Emissions Trading Scheme. The CCC could potentially be reformed to include: an explicit information provision role; consumption-based accounting of emissions and control of a policy instrument such as a balanced-budget carbon tax.

CO2-päästötaseenhallinta terästeollisuudessa

Tämän diplomityön tavoitteena oli kehittää hiilidioksiditaseen hallintamenetelmää Rautaruukin toiminnoille päästökaupan olosuhteissa. Taseenhallintamenetelmä sisältää päästöjen laskennan sekä päästöoikeuksien hallintaan liittyviä asioita. EU:n laajuisen päästökaupan reunaehdot määrittelee päästökauppadirektiivi ja sen antama päästöjen seurantaa ja raportointia koskeva monitorointiohje. Työssä on tarkasteltu hiilidioksidipäästöhistoriaa ja laskentamenetelmiä niiden Rautaruukin toimipaikkojen kohdalta, joiden oletetaan kuuluvan EU:n päästökaupan piiriin. Toimipaikoista on tarkasteltu erityisesti Raahen ja Koverharin terästehtaita, sillä ne muodostavat merkittävimmän osuuden konsernin Suomen toimipaikkojen hiilidioksidipäästöistä. Muita tarkasteltavia toimipaikkoja ovat Hämeenlinnan ja Dalsbrukin valssaamot Suomessa, Smedjebackenin terästehdas ja Boxholmin valssaamo Ruotsissa, Mo i Ranan terästehdas ja Profilerin valssaamo Norjassa sekä Nedstaalin valssaamo Hollannissa. Kustannustehokkaan ja hallitun päästökaupankäynnin perustaksi yritystasolla tarvitaan päästötaseenhallintamenetelmä, jonka avulla voidaan määrittää syntyneet päästöt komission monitorointiohjeen vaatimalla tavalla, arvioida tulevia päästömääriä sekä hallita päästökaupankäyntiä. Päästökaupanhallintaan sisältyviä asioita ovat saadut ilmaiset päästöoikeudet, ostettavien tai myytävien oikeuksien määrä, kaupankäynnin ajankohta, päästöoikeuksien erilaiset hankintamahdollisuudet, päästöoikeuksien hinnanmuodostus ja riskienhallinta.