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Axel Michaelowa - One of the best experts on this subject based on the ideXlab platform.
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transaction costs of the Kyoto Mechanisms
Climate Policy, 2003Co-Authors: Axel Michaelowa, Marcus Stronzik, Frauke Eckermann, Alistair HuntAbstract:Abstract Transaction costs will reduce the attractiveness of the Kyoto Mechanisms compared to domestic abatement options. Especially the project-based Mechanisms Clean Development Mechanism (CDM) and Joint Implementation (JI) are likely to entail considerable costs of baseline development, verification and certification. The Activities Implemented Jointly (AIJ) pilot phase and the Prototype Carbon Fund (PCF) programme give indications about the level of these costs. Under current estimates of world market prices for greenhouse gas emission permits, projects with annual emission reductions of less than 50,000 t CO2 equivalent are unlikely to be viable; for micro projects transaction costs can reach several hundred € per t CO2 equivalent. Thus, the Marrakech Accord rule to have special rules for small scale CDM projects makes sense, even if the thresholds chosen advantage certain project types; projects below 1000 t CO2 equivalent per year should get further exemptions. An alternative solution with no risk ...
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cdm host country institution building
Mitigation and Adaptation Strategies for Global Change, 2003Co-Authors: Axel MichaelowaAbstract:Contrary to earlier forecasts, the global greenhouse gas market will initially be characterised by low prices and a strong competition between the different Kyoto Mechanisms. The CDM involves higher transaction costs than the other Mechanisms and has lost a considerable share of its ‘early start’ advantage due to the continuous delays in defining the CDM rules on the international level. Host countries will have to compete intensively for CDM investments. Thus the development of effective institutions is crucial to reap benefits from this market, especially if a unilateral strategy is chosen. Countries should develop approval criteria and sectoral priorities in a broad stakeholder consultation. Moreover, capacity building of local actors, information exchange as well as marketing has to be organised. Experience from several countries shows that clear competencies are crucial to get investor confidence. Long-term professional staff is also an important asset. Fights between ministries will scare off investors. The optimum institution will be a CDM Office that is independent but has full approval powers. A second-best solution is a two-tiered system. A CDM Board with representatives of ministries would define criteria and priorities whereas a CDM Secretariat would evaluate (and possibly approve) project proposals and do outreach and marketing. Small countries would preferably use the existing focal point of the UNFCCC and flexibly involve consultants if project proposalscome in. Even under an optimal institutional structure, CDM projects will only be implemented if financing and contractual issues can be resolved.
Joachim Schleich - One of the best experts on this subject based on the ideXlab platform.
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Incentives for energy efficiency in the EU Emissions Trading Scheme
Energy Efficiency, 2009Co-Authors: Joachim Schleich, Karoline Rogge, Regina BetzAbstract:This paper explores the incentives for energy efficiency induced by the European Union Emissions Trading Scheme (EU ETS) for installations in the energy and industry sectors. Our analysis of the National Allocation Plans for 27 EU Member States for phase 2 of the EU ETS (2008–2012) suggests that the price and cost effects for improvements in carbon and energy efficiency in the energy and industry sectors will be stronger than in phase 1 (2005–2007), but only because the European Commission has substantially reduced the number of allowances to be allocated by the Member States. To the extent that companies from these sectors (notably power producers) pass through the extra costs for carbon, higher prices for allowances translate into stronger incentives for the demand-side energy efficiency. With the cuts in allocation to energy and industry sectors, these will be forced to greater reductions; thus, the non-ET sectors like household, tertiary, and transport will have to reduce less, which is more in line with the cost-efficient share of emission reductions. The findings also imply that domestic efficiency improvements in the energy and industry sectors may remain limited since companies can make substantial use of credits from the Kyoto Mechanisms. The analysis of the rules for existing installations, new projects, and closures suggests that incentives for energy efficiency are higher in phase 2 than in phase 1 because of the increased application of benchmarking to new and existing installations and because a lower share of allowances will be allocated for free. Nevertheless, there is still ample scope to further improve the EU ETS so that the full potential for energy efficiency can be realized.
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incentives for energy efficiency in the eu emissions trading scheme
Research Papers in Economics, 2008Co-Authors: Joachim Schleich, Karoline S Rogge, Regina BetzAbstract:This paper explores the incentives for energy efficiency induced by the European Union Emissions Trading Scheme (EU ETS) for installations in the energy and industry sectors. Our analysis of the National Allocation Plans for 27 EU Member States for phase 2 of the EU ETS (2008-2012) suggests that the price and cost effects for improvements in carbon and energy efficiency in the energy and industry sectors will be stronger than in phase 1 (2005-2007), but only because the European Commission has substantially reduced the number of allowances to be allocated by the Member States. To the extent that companies from these sectors (notably power producers) pass through the extra costs for carbon, higher prices for allowances translate into stronger incentives for demand- side energy efficiency. With the cuts in allocation to energy and industry sectors these will be forced to greater reductions, thus the non-ET sectors like household, tertiary and transport will have to reduce less, which is more in line with the cost-efficient share of emission reductions. The findings also imply that domestic efficiency improvements in the energy and industry sectors may remain limited since companies can make substantial use of credits from the Kyoto Mechanisms. The analysis of the rules for existing installations, new projects and closures suggests that incentives for energy efficiency are higher in phase 2 than in phase 1 because of the increased application of benchmarking to new and existing installations and because a lower share of allowances will be allocated for free. Nevertheless, there is still ample scope to further improve the EU ETS so that the full potential for energy efficiency can be realized.
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eu emissions trading an early analysis of national allocation plans for 2008 2012
Climate Policy, 2006Co-Authors: Regina Betz, Karoline S Rogge, Joachim SchleichAbstract:Abstract Based on 18 national allocation plans (NAPs) submitted to the European Commission for phase II (2008–2012) of the EU Emissions Trading Scheme (EU ETS), we find that, on average, the ET budgets in phase II are only about 2.6% below historical emissions in 2005, about 3.1% lower than the budgets in phase I (2005–2007), and 3% below projected emissions in 2010. While the EU-15 Member States (MS) intend to reduce emissions by about 8–11%, the implied excess allocation in the new Member States lies between 17% and 31%. Compared with a cost-efficient split of the required emission reductions, the ET budgets in the EU-15 MS are generally too large. Thus, in total, the burden for the non-trading sectors (households, tertiary and transport) is too high. Furthermore, the high shares of governments' intended and companies' possible use of Kyoto Mechanisms challenge the supplementarity principle. Our detailed analyses of the allocation methods of these NAPs (across countries and phases) suggest that MS shoul...
Ans Kolk - One of the best experts on this subject based on the ideXlab platform.
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strategic responses to global climate change conflicting pressures on multinationals in the oil industry
Social Science Research Network, 2003Co-Authors: David L Levy, Ans KolkAbstract:Multinational enterprises (MNEs) are increasingly facing global environmental issues which require coordinated market and non-market strategic responses. This article analyses the strategic responses by US and European multinational enterprises in the oil industry to the global climate change issue, considering the changes over time as well. Conventional drivers of strategy could not adequately explain the marked differences observed in the companies' responses. Instead, the study focused on the influence of the institutional environment. MNCs facing global issues such as climate change are immersed in multiple institutional contexts, subjecting them to competing pressures. The disparate reactions of U.S. and European oil companies in the early phase of the climate issue were found to be related to regulatory expectations, norms concerning the conduct of business-government relations, and cognitive assumptions regarding the future of fossil fuels and substitute technologies. These regulative, normative, and cognitive influences were associated with the institutional context of the MNCs' home country as well as with the specific history of each company. The oil companies perceived climate change as a major threat, and three of them adopted assertive responses; Exxon adopted an adversarial political strategy while BP and Shell pursued more accommodative and technologically oriented strategies. As the climate change issue matured, corporate perceptions were increasingly subject to convergent institutional pressures, which arose from the companies' common location in the global oil industry and from the emergence of climate change as a global issue arena. As a result of frequent interactions in these institutional environments, the companies have developed similar outlooks on markets and technologies. The emerging, more optimistic view of the future of the oil and gas business reduces the stakes and thus the need for assertive political or technological strategies. Moreover, companies are converging on the view that the flexible Kyoto Mechanisms will provide only weak constraints on carbon emissions, reducing the cost of compliance. As a result, there are few rewards for proactively taking the risk of being a technological first-mover, and a resistant strategy that aggressively challenges policy may not be worth the cost in political and social legitimacy.
Cameron Hepburn - One of the best experts on this subject based on the ideXlab platform.
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carbon trading a review of the Kyoto Mechanisms
Annual Review of Environment and Resources, 2007Co-Authors: Cameron HepburnAbstract:The three Kyoto flexible Mechanisms—emissions trading, the clean development mechanism (CDM), and Joint Implementation (JI)—have always been controversial. Proponents saw the Mechanisms as clever tools to ensure environmental outcomes were achieved at least cost. Reducing the costs of compliance, they argued, would make tighter environmental targets possible, and certainly more politically feasible. Detractors have argued that the flexible Mechanisms commoditize Earth's atmosphere in a manner that will allow dubious projects and the exchange of “hot air” to substitute for serious engagement on climate change. This chapter reviews the Kyoto flexible Mechanisms, which will become fully operative during the period 2008 to 2012. The review assesses their progress and success to date, examines the problems that have emerged, and considers suggestions for future developments in climate policy.
Regina Betz - One of the best experts on this subject based on the ideXlab platform.
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Incentives for energy efficiency in the EU Emissions Trading Scheme
Energy Efficiency, 2009Co-Authors: Joachim Schleich, Karoline Rogge, Regina BetzAbstract:This paper explores the incentives for energy efficiency induced by the European Union Emissions Trading Scheme (EU ETS) for installations in the energy and industry sectors. Our analysis of the National Allocation Plans for 27 EU Member States for phase 2 of the EU ETS (2008–2012) suggests that the price and cost effects for improvements in carbon and energy efficiency in the energy and industry sectors will be stronger than in phase 1 (2005–2007), but only because the European Commission has substantially reduced the number of allowances to be allocated by the Member States. To the extent that companies from these sectors (notably power producers) pass through the extra costs for carbon, higher prices for allowances translate into stronger incentives for the demand-side energy efficiency. With the cuts in allocation to energy and industry sectors, these will be forced to greater reductions; thus, the non-ET sectors like household, tertiary, and transport will have to reduce less, which is more in line with the cost-efficient share of emission reductions. The findings also imply that domestic efficiency improvements in the energy and industry sectors may remain limited since companies can make substantial use of credits from the Kyoto Mechanisms. The analysis of the rules for existing installations, new projects, and closures suggests that incentives for energy efficiency are higher in phase 2 than in phase 1 because of the increased application of benchmarking to new and existing installations and because a lower share of allowances will be allocated for free. Nevertheless, there is still ample scope to further improve the EU ETS so that the full potential for energy efficiency can be realized.
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incentives for energy efficiency in the eu emissions trading scheme
Research Papers in Economics, 2008Co-Authors: Joachim Schleich, Karoline S Rogge, Regina BetzAbstract:This paper explores the incentives for energy efficiency induced by the European Union Emissions Trading Scheme (EU ETS) for installations in the energy and industry sectors. Our analysis of the National Allocation Plans for 27 EU Member States for phase 2 of the EU ETS (2008-2012) suggests that the price and cost effects for improvements in carbon and energy efficiency in the energy and industry sectors will be stronger than in phase 1 (2005-2007), but only because the European Commission has substantially reduced the number of allowances to be allocated by the Member States. To the extent that companies from these sectors (notably power producers) pass through the extra costs for carbon, higher prices for allowances translate into stronger incentives for demand- side energy efficiency. With the cuts in allocation to energy and industry sectors these will be forced to greater reductions, thus the non-ET sectors like household, tertiary and transport will have to reduce less, which is more in line with the cost-efficient share of emission reductions. The findings also imply that domestic efficiency improvements in the energy and industry sectors may remain limited since companies can make substantial use of credits from the Kyoto Mechanisms. The analysis of the rules for existing installations, new projects and closures suggests that incentives for energy efficiency are higher in phase 2 than in phase 1 because of the increased application of benchmarking to new and existing installations and because a lower share of allowances will be allocated for free. Nevertheless, there is still ample scope to further improve the EU ETS so that the full potential for energy efficiency can be realized.
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eu emissions trading an early analysis of national allocation plans for 2008 2012
Climate Policy, 2006Co-Authors: Regina Betz, Karoline S Rogge, Joachim SchleichAbstract:Abstract Based on 18 national allocation plans (NAPs) submitted to the European Commission for phase II (2008–2012) of the EU Emissions Trading Scheme (EU ETS), we find that, on average, the ET budgets in phase II are only about 2.6% below historical emissions in 2005, about 3.1% lower than the budgets in phase I (2005–2007), and 3% below projected emissions in 2010. While the EU-15 Member States (MS) intend to reduce emissions by about 8–11%, the implied excess allocation in the new Member States lies between 17% and 31%. Compared with a cost-efficient split of the required emission reductions, the ET budgets in the EU-15 MS are generally too large. Thus, in total, the burden for the non-trading sectors (households, tertiary and transport) is too high. Furthermore, the high shares of governments' intended and companies' possible use of Kyoto Mechanisms challenge the supplementarity principle. Our detailed analyses of the allocation methods of these NAPs (across countries and phases) suggest that MS shoul...
