Emission allowance trading under the Clean Air Act Amendments: An incentive mechanism for the adoption of Clean Coal Technologies

International Nuclear Information System (INIS)

South, D.W.; McDermott, K.A.

1993-01-01

Title IV of the Clean Air Act Amendments of 1990 (P.L. 101-549) uses tradeable SO 2 allowances as a means of reducing acidic emissions from the electricity generating industry. The use of emission allowances generates two important results; first, utilities are given the flexibility to choose their optimal (least cost) compliance strategies and second, the use of emission allowances creates greater incentives for the development and commercialization of innovative emissions control technology. Clean Coal Technologies (CCTs) are able to generate electricity more efficiently, use a wide variety of coal grades and types, and dramatically reduce emissions of SO 2 , NO x , CO 2 , and PM per kWh. However, development and adoption of the technology is limited by a variety of regulatory and technological risks. The use of SO 2 emission allowances may be able to provide incentives for utility (and nonutility) adoption of this innovative technology. Emission allowances permit the utility to minimize costs on a systemwide basis and provides rewards for addition emission reductions. As CCTs are a more efficient and low emitting source of electricity, the development and implementation of this technology is desirable. This paper will explore the relationship between the incentives created by the SO 2 allowance market and CCT development. Regulatory hindrances and boons for the allowance market shall also be identified to analyze how market development, state mandates, and incentive regulation will effect the ability of allowances to prompt CCT adoption

Redefining RECs-Part 2: Untangling certificates and emission markets

International Nuclear Information System (INIS)

Gillenwater, Michael

2008-01-01

Renewable energy and greenhouse gas emissions markets are currently in a state of confusion regarding the treatment of Renewable Energy Certificate (RECs). How should emission-trading schemes treat RECs? How can emission mitigation policies provide real incentives for renewable generation? The objective of REC markets should be to promote additional renewable energy investments. The author asserts that defining RECs in terms of attributes, especially off-site attributes, does not further this goal. Ambiguous language such as 'environmental attribute' or 'environmental benefit' creates confusion in the marketplace while failing to address the relevant coordination issues with Renewable Portfolio Standard compliance markets, voluntary emission offset markets, or emission cap-and-trade markets. Specifically, defining RECs in terms of off-site attributes creates a number of problems, including that once an emissions cap-and-trade scheme is in place, such definitions of a REC can become indefensible. The author proposes to redefine RECs in terms of on-site attributes, which resolves the aforementioned problems and allows compliance and voluntary renewable energy and emission markets to function without conflicts. Ideally, environmental commodities should be homogeneous, first best measures of the relevant environmental good, as well as easily measured and verified. The author proposes tradable environmental commodities that achieve these characteristics

The future(s) of emission allowances

International Nuclear Information System (INIS)

Rosenzweig, K.M.; Villarreal, J.A.

1993-01-01

The Clean Air Act Amendments of 1990 (CAAA) established a sulfur dioxide emission allowance system to be implemented by the US Environmental Protection Agency (EPA). Under the two-phase implementation of the program, electric utilities responsible for approximately 70 percent of SO 2 emissions in the United States will be issued emission allowances, each representing authorization to emit one ton of sulfur dioxide during a specified calendar year or a later year. Allowances will be issued to utilities with electric-generating units affected by the CAAA limits, as well as to certain entities which may choose to opt-in to the program. Each utility or other emission source must hold a number of allowances at least equal to its total SO 2 emissions during any given year. Unused allowances may be sold, traded, or held in inventory for use against SO 2 emissions in future years. Anyone can buy and hold allowances, including affected utilities, non-utility companies, SO 2 allowances brokers and dealers, environmental groups, and individuals. During Phase I of the program, allowances equivalent to approximately 6.4 million tons of SO 2 emissions will be allocated annually to a group of 110 large, high-SO 2 -emitting power plants. In Phase II, virtually all power-generating utilities (representing approximately 99.4 percent of total US utility emissions) will be subject to the program. The number of allowances issued will increase to approximately 8.9 million a year, with certain special allocations raising the actual number issued to 9.48 million between the years 2000 to 2009, and 8.95 million yearly thereafter. Thus, the CAAA goal of annual emissions of 9 million tons should be achieved by 2010, when virtually all US emission sources will be participating in the program

Strategic partitioning of emissions allowances in the EU ETS

Energy Technology Data Exchange (ETDEWEB)

Boehringer, Christoph (Carl von Ossietzky Univ. Oldenburg (Germany)); Rosendahl, Knut Einar (Research Dept., Statistics Norway, Oslo (Norway))

2008-07-01

The EU ETS opens up for strategic partitioning of emissions allowances by the Member States. In this paper we examine the potential effects of such strategic behavior on quota prices and abatement costs. We show that although marginal abatement costs in the sectors outside the EU ETS become quite differentiated, the effects on the quota price and total abatement costs are small. More abatement, however, takes place in the old Member States that are importers of allowances, compared to the cost-effective outcome. Single countries can nevertheless significantly affect the outcome of the EU ETS by exploiting their market power

Stochastic Differential Equation Models for the Price of European CO2 Emissions Allowances

Directory of Open Access Journals (Sweden)

Wugan Cai

2017-02-01

Full Text Available Understanding the stochastic nature of emissions allowances is crucial for risk management in emissions trading markets. In this study, we discuss the emissions allowances spot price within the European Union Emissions Trading Scheme: Powernext and European Climate Exchange. To compare the fitness of five stochastic differential equations (SDEs to the European Union allowances spot price, we apply regression theory to obtain the point and interval estimations for the parameters of the SDEs. An empirical evaluation demonstrates that the mean reverting square root process (MRSRP has the best fitness of five SDEs to forecast the spot price. To reduce the degree of smog, we develop a new trading scheme in which firms have to hand many more allowances to the government when they emit one unit of air pollution on heavy pollution days, versus one allowance on clean days. Thus, we set up the SDE MRSRP model with Markovian switching to analyse the evolution of the spot price in such a scheme. The analysis shows that the allowances spot price will not jump too much in the new scheme. The findings of this study could contribute to developing a new type of emissions trading.

Auction design for the allocation of carbon emission allowances: uniform or discriminatory price?

DEFF Research Database (Denmark)

Cong, Ronggang; wei, yi-ming

2010-01-01

Only four states used auction in Phase Ⅰ (2005-2007) of the European Union Emission Trading System, of which four used a uniform-price sealed auction format. Here we discuss whether the auction should adopt a uniform-price or discriminatory-price format using an agent-based carbon allowances...... auction model established for the purpose. The main conclusions are as follows: (1) when carbon allowances are relatively scarce, the government should use a discriminatory-price auction; when carbon allowances are relatively abundant, the government should use a uniform-price auction. (2) Uncertainty......) The uniform-price auction is relatively insensitive to market structure. However, a monopoly market is more likely to develop under the discriminatory-price auction format. The results of the model have some policy implications for designing carbon market mechanisms in the future....

An explanation of carbon emission markets

International Nuclear Information System (INIS)

2009-01-01

After having outlined the necessity to drastically reduce anthropic carbon emissions, and discussed how to associate standards, taxes and quota markets, the authors describe how carbon emission markets have emerged: the Kyoto protocol, the emission trade scheme (ETS) of the European Union, other carbon markets (existing or in preparation). They introduce and present four pillars of carbon emission markets: the allocation process, the reliability of emission measurement and control, market records and transparency, and introduction of flexibility. They examine the possibility of success in the development of a greenhouse gas emission market. The authors discuss the problems raised by a design of carbon markets by government and their use by private actors, how to connect existing or future regional carbon markets, the integration of forest and agriculture through new compensatory mechanisms, how to face carbon leaks by widening carbon markets

Future prices and market for SO2 allowances

International Nuclear Information System (INIS)

Sanghi, A.; Joseph, A.; Michael, K.; Munro, W.; Wang, J.

1993-01-01

The expected price of SO 2 emission allowances is an important issue in energy and integrated resource planning activities. For example, the expected price of SO 2 allowances in needed in order to evaluate alternative strategies for meeting SO 2 provisions of the Clean Air Act Amendments of 1990. In addition, the expected SO 2 allowance price is important to state public utility regulators who must provide guidance on rate-making issues regarding utility compliance plans which involve allowance trading and direct investment of SO 2 control technologies. Last but not the least, the expected SO 2 allowance price is an important determinant of the future market for natural gas and low sulfur coal. The paper develops estimates of SO 2 allowance prices over time by constructing national supply and demand curves for SO 2 reductions. Both the supply and demand for SO 2 reductions are based on an analysis of the sulfur content of fuels burned in 1990 by utilities throughout the United States; and on assumptions about plant retirements, the rate of new capacity growth, the types of new and replacement plants constructed, the costs of SO 2 reduction measures and legislation by midwest states to maintain the use of high sulfur coal to protect local jobs. The paper shows that SO 2 allowance prices will peak around the year 2000 at about $500 per ton, and will eventually fall to zero by about the year 2020. A sensitivity analysis indicates that the price of SO 2 allowances is relatively insensitive to assumptions regarding the availability of natural gas or energy demand growth. However, SO 2 allowance prices tend to be quite sensitive to assumptions regarding regulations which may force early retirement of existing power plants and possible legislation which may reduce CO 2 emissions

Sulfur dioxide emissions and market effects under the Clean Air Act Acid Rain Program

International Nuclear Information System (INIS)

Zipper, C.E.; Gilroy, L.

1998-01-01

The Clean Air Act Amendments of 1990 (CAAA90) established a national program to control sulfur dioxide (SO 2 ) emissions from electricity generation. CAAA90's market-based approach includes trading and banking of SO 2 -emissions allowances. The paper presents an analysis of data describing electric utility SO 2 emissions in 1995, the first year of the program's Phase I, and market effects over the 1990-95 period. Fuel switching and flue-gas desulfurization were the dominant means used in 1995 by targeted generators to reduce emissions to 51% of 1990 levels. Flue-gas desulfurization costs, emissions allowance prices, low-sulfur coal prices, and average sulfur contents of coals shipped to electric utilities declined over the 1990-95 period. Projections indicate that 13-15 million allowances will have been banked during the programs' Phase I, which ends in 1999, a quantity expected to last through the first decade of the program's stricter Phase II controls. In 1995, both allowance prices and SO 2 emissions were below pre-CAAA90 expectations. The reduction of SO 2 emissions beyond pre-CAAA90 expectations, combined with lower-than-expected allowance prices and declining compliance costs, can be viewed as a success for market-based environmental controls. 21 refs., 6 figs., 3 tabs

Clean air, clear market. Making emissions trading work: The role of a computer-assisted auction

International Nuclear Information System (INIS)

Bartels, C.W.; Marron, D.B.; Lipsky, M.I.

1993-01-01

Creating a new commodity presents the chance to develop new markets in which to trade it. In many cases, existing markets can be adapted easily; in other cases it proves worthwhile to develop new forms that reflect special characteristics of the commodity and those who trade it. In the case of the sulfur dioxide (SO 2 ) emission allowances created by the Clean Air Act Amendments of 1990, a number of standard market forms already have been adopted. While these will prove useful for handling some transactions, a new Market Clearing Auction (MCA) offers buyers and sellers a centralized marketplace for trading SO 2 emission allowances. The MCA, which was developed by the brokerage firm Cantor Fitzgerald, is a computer-assisted open-quotes smartclose quotes auction designed to replicate the outcome of an efficient market in emission allowances, and accepts bids and offers for any possible combination of allowances. Orders can be submitted for streams of allowances. Orders can be submitted for streams of allowances covering more than one year. The auction then determines the combination of bids and offers that maximizes the gains from trades in the market, and establishes uniform market clearing prices for each allowance issue (1995, 1996, and so on). Once executed, trades are settled on a cash-forward basis; that is, allowances are delivered and payments are made at future dates

Utility allowed returns and market extremes

International Nuclear Information System (INIS)

Murry, D.A.; Nan, G.D.; Harrington, B.M.

1993-01-01

In recent years interest rates have fluctuated from exceptionally high levels in the early 1980s to their current levels, the lowest in two decades. Observers and analysts generally have assumed that allowed returns by regulatory commissions follow the movement of interest rates; indeed some analysts use a risk premium method to estimate the cost of common equity, assuming a constant and linear relationship between interest rates and the cost of common equity. That suggests we could expect a relatively stable relationship between interest rates and allowed returns, as well. However, a simple comparison of allowed returns and interest rates shows that this is not the case in recent years. The relationship between market interest rates and the returns allowed by commissions varies and is obviously a great deal more complicated. Empirically, there appears to be only a narrow range where market interest rates significantly affect the allowed returns on common stock set by state commissions, at least for electric and combination utilities. If rates are at historically low levels, allowed returns based largely on market rates will hasten subsequent rate filings, and commissions appear to look beyond the low rate levels. Conversely, it appears that regulators do not let historically high market rates determine allowed returns either. At either high or low interest levels, caution seems to be the policy

Empirical Evidence on Time-Varying Hedging Effectiveness of Emissions Allowances under Departures from the Cost-of-Carry Theory

Directory of Open Access Journals (Sweden)

Kai Chang

2013-01-01

Full Text Available Under departures from the cost-of-carry theory, traded spot prices and conditional volatility disturbed from futures market have significant impacts on futures price of emissions allowances, and then we propose time-varying hedge ratios and hedging effectiveness estimation using ECM-GARCH model. Our empirical results show that conditional variance, conditional covariance, and their correlation between between spot and futures prices exhibit time-varying trends. Conditional volatility of spot prices, conditional volatility disturbed from futures market, and conditional correlation of market noises implied from spot and futures markets have significant effects on time-varying hedge ratios and hedging effectiveness. In the immature emissions allowances market, market participants optimize portfolio sizes between spot and futures assets using historical market information and then achieve higher risk reduction of assets portfolio revenues; accordingly, we can obtain better hedging effectiveness through time-varying hedge ratios with departures from the cost-of-carry theory.

Carbon allowance auction design of China's emissions trading scheme: A multi-agent-based approach

International Nuclear Information System (INIS)

Tang, Ling; Wu, Jiaqian; Yu, Lean; Bao, Qin

2017-01-01

In this paper, a multi-agent-based ETS simulation model is proposed for carbon allowance auction design in China. In the proposed model, two main agents, i.e., the government (the ETS implementer) and the firms in different sectors (the ETS targets), are considered. Under the ETS policy, all agents make various decisions individually according to their own goals, and interact with each other through three main markets: the commodity market, the primary carbon auction market and the secondary carbon trading market. Different popular auction designs are introduced into the ETS formulation to offer helpful insights into China's ETS design. (1) Generally, the ETS would lead to positive effects on China's carbon mitigation and energy structure improvement, but a negative impact on economy. (2) As for auction forms, the uniform-price design is relatively moderate, while the discriminative-price design is quite aggressive in both economic damage and emissions reduction. (3) As for carbon price, the uniform-price auction might generate a slightly higher market clearing price than the discriminative-price auction, and the prices under two auction rules fluctuate about RMB 40 per metric ton. (4) As for carbon cap, the total allowances in the carbon auction market should be carefully set to well balance economic growth and mitigation effect. - Highlights: • A multi-agent-based model is proposed for China's emissions trading scheme (ETS). • Two main economic agents are included: government and firms in different sectors. • Auction-based allocation for initial carbon allowances is especially investigated. • Economic and environmental impacts of different auction designs are analyzed. • Results confirm the validity of the model and give helpful insights into ETS design.

Clean Air Markets - Allowances Query Wizard

Data.gov (United States)

U.S. Environmental Protection Agency — The Allowances Query Wizard is part of a suite of Clean Air Markets-related tools that are accessible at http://camddataandmaps.epa.gov/gdm/index.cfm. The Allowances...

Stochastic optimal generation bid to electricity markets with emissions risk constraints.

Science.gov (United States)

Heredia, F-Javier; Cifuentes-Rubiano, Julián; Corchero, Cristina

2018-02-01

There are many factors that influence the day-ahead market bidding strategies of a generation company (GenCo) within the framework of the current energy market. Environmental policy issues are giving rise to emission limitation that are becoming more and more important for fossil-fueled power plants, and these must be considered in their management. This work investigates the influence of the emissions reduction plan and the incorporation of the medium-term derivative commitments in the optimal generation bidding strategy for the day-ahead electricity market. Two different technologies have been considered: the high-emission technology of thermal coal units and the low-emission technology of combined cycle gas turbine units. The Iberian Electricity Market (MIBEL) and the Spanish National Emissions Reduction Plan (NERP) defines the environmental framework for dealing with the day-ahead market bidding strategies. To address emission limitations, we have extended some of the standard risk management methodologies developed for financial markets, such as Value-at-Risk (VaR) and Conditional Value-at-Risk (CVaR), thus leading to the new concept of Conditional Emission at Risk (CEaR). This study offers electricity generation utilities a mathematical model for determining the unit's optimal generation bid to the wholesale electricity market such that it maximizes the long-term profits of the utility while allowing it to abide by the Iberian Electricity Market rules as well as the environmental restrictions set by the Spanish National Emissions Reduction Plan. We analyze the economic implications for a GenCo that includes the environmental restrictions of this National Plan as well as the NERP's effects on the expected profits and the optimal generation bid. Copyright © 2017 Elsevier Ltd. All rights reserved.

ACCOUNTING FOR GREENHOUSE GASES EMISSIONS ALLOWANCES IN ROMANIA

Directory of Open Access Journals (Sweden)

Marius Deac

2013-02-01

Full Text Available The present paper tries to analyze the accounting challenges that the implementation of EU Emissions Trading Scheme has risen. On 2 December 2004, IASB has issued an interpretation regarding the accounting of the GHG emissions allowances (IFRIC 3 „Emission Rights”. This interpretation should have been effective for annual periods beginning after 1 March 2005, the first year of the EU Emission Trading Scheme implementation. Less than a year after it was issued, IFRIC has withdrawn IFRIC 3. In December 2007, IASB has started a new project in order to provide guidance on accounting for carbon allowances called Emissions Trading Schemes Project. In the absence of an accounting standard regarding the accounting of these emissions allowances a diversity of accounting practices have been identified. Nowadays, there are three main accounting practices for the recognition of the emissions allowances and the GHG emissions liabilities: IFRIC 3 approach, the government grants approach and the net liability or off balance sheet approach. The accounting treatment of greenhouse gas emissions allowances by Romanian companies resembles the net liability or off balance sheet approach. Finance Ministry Order no. 1118/2012 states that GHG emission certificates should be recognized as fixed assets (if the entity is expecting a profit in the long term or in the category of short term investments (if the entity is expecting a profit in the short term. The accounting of the greenhouse gas emissions allowances described above is applicable mainly to traders of such certificates and not for the installations in the scope of the EU ETS directive, which should recognize GHG emissions off balance sheet, at their nominal value (nil if received for free. The shortfall or excess of allowances will be recognized in the profit or loss as they are bought or sold by the entity (the accounting treatment imposed by Finance Ministry Order no. 3055/2009.

The response of the Beijing carbon emissions allowance price (BJC) to macroeconomic and energy price indices

International Nuclear Information System (INIS)

Zeng, Shihong; Nan, Xin; Liu, Chao; Chen, Jiuying

2017-01-01

In 2013, China opened pilot carbon emission trading markets in seven provinces, where carbon emission allowances have now been traded for more than two years. In this paper, we employ a structural VAR model and the price of the Beijing carbon emission allowance to study the dynamic relationships among the price of the carbon emission allowance, economic development and the price of energy. This paper's data cover the period from April 2, 2014 to November 6, 2015. This paper provides information that will be helpful to both investors and governmental policy makers. The results show that (1) an increase of one standard deviation in the coal price leads to an initial increase of approximately 0.1% in the Beijing carbon price. After 2 days, there is a decrease of less than 0.1%, and the price gradually increases by approximately 0.1% after 30 days; (2) the price of the Beijing carbon emission allowance is mainly affected by its own historical price; (3) the Beijing carbon emission allowance price, crude oil price, natural gas price and economic development have positive – albeit non-significant – correlations. - Highlights: • This paper examines the response of the Beijing carbon emission allowance price. • A rise in coal prices will have different effects in different lag stages. • There are positive correlations between the BJC and economic development.

A Study of the Determinants of Emissions Unit Allowance Price in the European Union Emissions Trading Scheme

Directory of Open Access Journals (Sweden)

Alina Maydybura

2011-12-01

Full Text Available In 2005 the European Union (EU began the first phase of the largest and most ambitious emissions trading system (EU ETS ever attempted, which then applied to all members of the EU. In its second phase whichbegan in 2008 the EU ETS now applies to all 27 members of the EU together with Norway, Iceland and Lichtenstein, the members of the European Economic Area (EEA which are not members of the Union. Inthe first phase of the EU ETS permits to emit carbon into the atmosphere known as European Union Allowances (EUA were traded in a market where the price rose to €30 and eventually fell to well below 10 Euro cents as the imperfections of the market became obvious. In the second phase which began in 2008 the price has fluctuated between €30 and €8. EUA are traded in a manner which is similar to the trading of financial instruments and a range of derivatives has developed with the total value of the market now above €120b, a growing market dominated by a few large players.This paper reports some results of an empirical investigation into the factors which appear to drive the carbon price and the key determinants of the price of an EUA. Over the last decade a number of environmental products have been developed alongside the EUA, including Certified Emissions Reductions (CERs, Renewable Energy Certificates and White Certificates (energy efficiency credits and markets have developed for a range of these environmental products. A better understanding of the determinants of these markets willhelp regulators manage these new markets and this paper aims to enhance our knowledge of the market.

Real options theory to the pricing of allowances contract to carbon emission; Teoria de opcoes reais para a precificacao de contrato de permissoes de emissao de carbono

Energy Technology Data Exchange (ETDEWEB)

Horii, Leticia Takahashi; Parente, Virginia; Goldemberg, Jose [Universidade de Sao Paulo (IEE/USP), SP (Brazil). Inst. de Eletrotecnica e Energia

2010-07-01

The objective of this work is to develop a pricing model contract for allowances to emit carbon through Real Options. Emissions allowances are equivalent tons of carbon traded between Annex I countries from companies that have the ability to reduce their emissions beyond what is assigned to it. The surplus of emission reductions produced by these companies may be sold in the emissions market. Thus, this work can contribute to improving the management of contractual risk and enable companies estimated the price at which a contract can be signed. Properly evaluate the contracts that the market environment is a challenge for companies. The historic low of information and randomness in the price of carbon allowances in the spot market suggest extreme caution in its use. (author)

Emission allowances -- Long-term price trend

International Nuclear Information System (INIS)

Lennox, F.H.

1994-01-01

Estimated trends in emission allowance (EA) values have been of interest to all those affected by the Clean Air Act Amendments of 1990 since it became law in 1990. The authors published estimates of the values of EAs in December 1991, and revised their estimate in November 1992. The summary trends of the 1992 estimate is shown here. General estimates such as these are no longer useful. Everyone directly involved in complying with the Act or in buying and selling allowances has developed their own outlook on EA values. Many recent trades have been publicized. The prices from the first auction are also well known. Therefore this article is concerned only with what might happening the long-run. Once Phase 2 compliance is essentially complete and emissions roughly match Emission Allowance allocations of some 9.8 million tons annually, what pressures will there be on prices? What will be the direction of values after Phase 2 is in balance?

Efficiency of European emissions markets: Lessons and implications

International Nuclear Information System (INIS)

Krishnamurti, Chandrasekhar; Hoque, Ariful

2011-01-01

While prior studies have shown that emission rights and futures contracts on emission rights are efficiently priced, there are no studies on the efficiency of the options market. Therefore, this study fills the gap. We examine empirical evidence regarding the efficiency of the options market for emissions rights in Europe. We employ the put-call parity approach to test the efficiency of options on emission rights traded in the European market. This implies that firms can trade options on emission rights in addition to other existing strategies in order to manage their greenhouse gas emissions. - Highlights: → Efficiency of the European options market for emissions. → Design implications for the development of emissions trading schemes in other countries. → Governance issues pertaining to emissions trading.

Trading sulfur dioxide allowances

International Nuclear Information System (INIS)

Goldburg, C.B.; Lave, L.B.

1992-01-01

The 1990 Clean Air Act is aimed at generators larger than 25 MW, as these are the largest polluters. Market incentives give each source an emissions allocation but also flexibility. If a plant has lower emissions than the target, it can sell the 'surplus' emissions as allowances to plants that fail to meet the target. Only a few trades have occurred to date. Market-based incentives should lower the costs of improving environmental quality significantly. However, currently institutional dificulties hamper implementation

Korea's emission trading scheme and policy design issues to achieve market-efficiency and abatement targets

International Nuclear Information System (INIS)

Park, Hojeong; Hong, Won Kyung

2014-01-01

In 2008, the government of Republic of Korea (Korea) announced the national abatement target aiming at 30% reductions from the Business-as-Usual projections by 2020. Accordingly, the Emission Trading Scheme (ETS) will be implemented from 2015 onwards. As ETS performance substantially depends on the structural design, it is critically important to examine the details of Korean ETS for the achievement of cost effectiveness and concurrent development of an active emission trading market. This paper addresses several policy design issues for this purpose. After providing an overview on the current framework of Korean ETS, we propose ways to achieve flexibility, consistency and market efficiency of the program in consideration of the preexisting policies. Issues in policy design are discussed by focusing on allowance allocation, market stabilization measures and price mechanism in the emission and energy markets in Korea. This paper will serve as a practical guideline for establishing sustainable and market-efficient Korean ETS that can be compatible with the international standards as in the EU ETS. - Highlights: • Emission Trading Scheme (ETS) will be implemented from 2015 in Korea to reduce CO 2 . • ETS performance substantially depends on structural design. • We provide policy overview on the current framework of Korean ETS. • Several policy design issues are discussed for developing policy consistency. • We focus on allowance allocation, allowance reserve and market stabilization measures

Market Power in Laboratory Emission Permit Markets

International Nuclear Information System (INIS)

Godby, R.

2002-01-01

Many proposals suggesting the use of markets to control pollution assume markets will be competitive. When markets do not exhibit competitive characteristics, however, should they still be expected to result in efficiency improvement relative to traditional approaches? This paper employs experimental economic methods to examine the effect of market structure on the use of marketable emissions permits. Results indicate that in a market with one dominant firm and a number of fringe firms, strategic manipulation occurs repeatedly in the laboratory as predicted by market power models, undermining the allocative and dynamic efficiency benefits such markets offer. When firms compete in a downstream product market dominated by the same single firm, market efficiency can actually be reduced with the implementation of permit markets. Final market efficiencies reflect initial endowments and are influenced by competitive conditions elsewhere in the economy, indicating that policy-makers should carefully consider whether markets are appropriate in such circumstances

Emissions Trading - Growing Markets with Impacts on Energy and Biofuel Business

International Nuclear Information System (INIS)

Otterstroem, Tomas

2006-01-01

The markets for environmental derivatives are relatively new, e.g. in June 2006, the EU ETS has been operational for eighteen months and the Swedish electricity-certificate scheme has been operating for about three years. There is a clear trend towards an increasingly CO 2 -constrained economy, in which trading schemes are implemented with the purpose of reducing the overall cost of reaching the targets set. The business impacts of emissions trading are significant for many actors, both in terms of direct financial effects (e.g. need to buy or sell allowances) as indirect ones (e.g. changes in the competitiveness of fuels, the price of electricity and the demand for low-emission technologies). During 2005, almost 800 million tons of CO 2 equivalents have changed owner on the carbon markets. The market and variety of products are increasing and the market volume is expected to exceed 10 billion euros in 2006

Model rules and regulations for a global CO2 emissions credit market

International Nuclear Information System (INIS)

Sandor, R.L.; Cole, J.B.; Kelly, M.E.

1994-01-01

On 21 April 1993, on the occasion of Earth Day, the United States affirmed its commitment to reducing emissions of greenhouse gases to their 1990 levels by the year 2000. In doing so, the United States joined the European Union (EU), Japan, and approximately 141 other countries that had either committed themselves to this international objective or subscribed to the general principles contained in the United Nations Framework Convention on Climate Change, signed at UNCED, Rio de Janeiro, June 1992. The commitment of these three trading groups provides the basis for recommending that a market for tradeable carbon dioxide (CO 2 ) emission entitlements among these groups be implemented as soon as an initial set of rules and regulations can be drafted. The goal of a tradeable CO 2 entitlement or credit market is to lower the cost of limiting emissions. The Costs of CO 2 emission abatement are lowered because the market encourages more emission reductions to be produced by the most efficient resources. The ability easily to selI CO 2 credits created through large emission cuts allows cost recovery by, and incentives for, the most efficient sources of emission reductions. The purpose of this paper is to stimulate debate by providing model rules and regulations for a tradeable CO 2 emission credit market. The trading rules and regulations proposed here are meant to initiate a process whereby participants will iterate toward a final set of rules and regulations. Therefore, our proposal should create a point of departure for further adjustments and transformation to the initial set of recommendations. A specific proposal will be advanced at this point in order to provide a basis for the conceptualization of this global market. Moreover, this specific proposal will help focus dialogue and may provide insight into the general recommendations presented in the balance of this paper

Should the regulator allow citizens to participate in tradable permits markets?

International Nuclear Information System (INIS)

Rousse, Olivier

2008-01-01

Since the seminal paper written by Weitzman (1974), the 'prices vs. quantities' debate regarding choice of policy instrument under imperfect information and uncertainty has been an ongoing concern for economists, especially in the field of the environment. In this debate, several papers have recommended that the regulator allow pollution victims (citizens) to participate in tradable permits markets. According to this literature, when pollution victims purchase and withhold (i.e. destroy) emission rights from polluting firms, this means that the overall quota is not efficient and that welfare gains will be realised. In this paper, we present further theoretical results showing that citizen participation in tradable quotas markets may become welfare decreasing. Indeed, citizens can aggravate the first error made by the regulator if they are also under uncertainty about the marginal benefit curve or if they exhibit strong enough risk aversion. Therefore, we recommend that the regulator limit citizen participation to a certain percentage of permits. In doing so, we extend the 'prices versus quantities' debate to simultaneous uncertainty and risk aversion by showing that a marketable permits system offers the regulator an opportunity to control the negative effects of agents' (citizens' and firms') risk aversion on welfare. (author)

The european union emission trading scheme and energy markets: economic and financial analysis

International Nuclear Information System (INIS)

Bertrand, Vincent

2012-01-01

This thesis investigates relationships between the European Union Emission Trading Scheme (EU ETS) and energy markets. A special focus is given to fuel switching, the main short term abatement measure within the EU ETS. This consists in substituting Combined Cycle Gas Turbines (CCGTs) for hard-coal plants in off-peak power generation. Thereby coal plants run for shorter periods, which allows power producers to reduce their CO 2 emissions. In Chapter 1, we outline different approaches explaining relationships between carbon and energy markets. We also review the literature relating to these issues. Next, we further describe the fuel switching process and, in particular, we analyze the influence of energy and environmental efficiency of thermal power plants (coal and gas) on fuel switching. In Chapter 2, we provide a theoretical analysis that shows how differences in the efficiency of CCGTs can rule interactions between gas and carbon prices. The main result shows that the allowance price becomes more sensitive to the gas price when the level of CO 2 emissions increases. In Chapter 3, we examine interactions between carbon, coal, gas and electricity prices in an empirical study. Among the main results, we find that there is a significant link between carbon and gas prices in the long-run equilibrium. In Chapter 4, we analyze the cross-market price discovery process between gas and CO 2 markets. We identified in previous chapters that there is a robust significant link between gas and CO 2 markets. They are linked commodities, and their prices are affected by the same information. In an empirical analysis, we find that the carbon market is the leader in cross-market price discovery process. (author)

Reducing emissions from deforestation and degradation: What contribution from carbon markets?

OpenAIRE

Bellassen , Valentin; Crassous , R.; Dietzsch , L.; Schwartzman , S.

2008-01-01

Tropical deforestation is responsible for 15-20% of total man-made emissions of greenhouse gases. In December 2007, at the international conference of Bali, the United Nations acknowledged that a viable solution to climate change must include a mechanism to limit deforestation and forest degradation. Today, the most widely used economic tool to reduce emissions is carbon markets: caps on emitters, and trade allowed between emitters and reducers, drive a price signal on carbon and provide ince...

The impact of China's carbon allowance allocation rules on the product prices and emission reduction behaviors of ETS-covered enterprises

International Nuclear Information System (INIS)

Zhang, Yue-Jun; Wang, Ao-Dong; Tan, Weiping

2015-01-01

It is an important task for China to allocate carbon emission allowance to realize its carbon reduction target and establish carbon trading market. China has designed several allocation rules within seven pilot regions. What influence those rules may cause is closely related with the enthusiasm of emission trading scheme (ETS) covered enterprises' participation in carbon market, and more importantly, with the mechanism design and sustainable development of carbon market. For this purpose, the multi-stage profit model is developed to analyze the ETS-covered enterprises' product prices and emission reduction behaviors under different allocation rules. The results show that, first, under the rules of grandfathering, self-declaration and auctioning, when deciding the optimal product price and optimal carbon emission reduction, those enterprises may focus on maximizing current stage profit; however, under the rule of benchmarking, those enterprises may care more about the impact of current decisions on the profit in next stage. Second, the optimal product price policy is positively correlated with the price of the same kind products, consumers' low-carbon awareness and government subsidy. Finally, along with the increase of carbon price, consumers' low-carbon awareness and government subsidy and the decrease of carbon emission cap, those enterprises tend to reduce carbon emissions. - Highlights: • Analyze the impact of carbon allowance allocation rules on ETS-covered enterprises. • For grandfather, self-declaration and auction, they may maximize current profits. • For benchmark, they care the effect of current decisions on the coming profits. • The optimal product price positively relates to low-carbon awareness and subsidy. • Carbon price, low-carbon awareness and subsidy rise leads their emission reduction.

Emissions trading under market imperfections

Energy Technology Data Exchange (ETDEWEB)

Lappi, P.

2013-08-15

In this thesis we consider emissions trading under various market imperfections such as uncertainty over permit price, imperfect competition and noncompliance. First, we study the effects of uncertain permit price on the firms choice of emission intensive and clean inputs in an multi-input production process. We also assess the risk aversion factors of some Finnish heat and power producers. Second, we study imperfect competition in output and permit markets with a two-stage model, where output decision is made before permit trades. The emphasis is on the strategic interaction between firms and on the efficiency increasing regulation. Third, we turn back to uncertainty and analyse the welfare difference between emissions trading and emission tax, when some of the firms may be noncompliant. The main finding is that welfare is greater with emission tax than with emissions trading, when at least one firm is noncompliant. Finally, we extend some existing models of permit banking and borrowing to encompass also noncompliant behavior of firms. Here, we analyse the incentives of compliant firms to become noncompliant at some point in time and also the time paths of the choice variables. (orig.)

Economic rationale for an emission allowance trading program

International Nuclear Information System (INIS)

Anon.

1992-01-01

The assumption behind the economic model of allowance trading is that managers of firms are better at solving pollution abatement problems than government overseers. This is because firms know more than an environmental regulator about their own operations and because the profit motive, rather than direct government mandate of compliance decisions, may be more effective at minimizing emission control costs. The allowance trading program in the CAAA is designed to provide firms with an incentive to make good choices about how to reduce emissions by allowing the firm to reduce compliance cost and profit from trading. This chapter discusses the benefits of allowance trading and summarizes the economic literature on tradable pollution rights. 17 refs., 2 figs

Carbon-dioxide emissions trading and hierarchical structure in worldwide finance and commodities markets.

Science.gov (United States)

Zheng, Zeyu; Yamasaki, Kazuko; Tenenbaum, Joel N; Stanley, H Eugene

2013-01-01

In a highly interdependent economic world, the nature of relationships between financial entities is becoming an increasingly important area of study. Recently, many studies have shown the usefulness of minimal spanning trees (MST) in extracting interactions between financial entities. Here, we propose a modified MST network whose metric distance is defined in terms of cross-correlation coefficient absolute values, enabling the connections between anticorrelated entities to manifest properly. We investigate 69 daily time series, comprising three types of financial assets: 28 stock market indicators, 21 currency futures, and 20 commodity futures. We show that though the resulting MST network evolves over time, the financial assets of similar type tend to have connections which are stable over time. In addition, we find a characteristic time lag between the volatility time series of the stock market indicators and those of the EU CO(2) emission allowance (EUA) and crude oil futures (WTI). This time lag is given by the peak of the cross-correlation function of the volatility time series EUA (or WTI) with that of the stock market indicators, and is markedly different (>20 days) from 0, showing that the volatility of stock market indicators today can predict the volatility of EU emissions allowances and of crude oil in the near future.

The market effectiveness of electricity reform: A case of carbon emissions trading market of Shenzhen city

Science.gov (United States)

Wang, Yongli; Wang, Gang; Zuo, Yi; Fan, Lisha; Xiao, Yao

2017-03-01

In the 13th Five-Year Plan, the Chinese government proposed to achieve the national carbon emission trading market established by 2017. The establishment of carbon emission trading market is the most important one in power reform, which helps to promote the power reform and achieve the goal of energy saving and emission reduction. As the bond of connecting environment energy issues and the economic development, carbon emissions trading market has become a hot research topic in the related fields, by market means, it incentive the lower cost subject emissions to undertake more reductions and therefore to benefit, the body of the high cost finished the task by buying quota reduction, to achieve the effect of having the least social total cost. Shenzhen has become the first city in China to start carbon trading pilot formally on June 16, 2013, online trading on June 18. The paper analyzes the market effectiveness of electricity reform in China, which takes carbon emissions trading market of Shenzhen city for example, and gives some suggestions for future development.

Trader types and volatility of emission allowance prices. Evidence from EU ETS Phase I

International Nuclear Information System (INIS)

Balietti, Anca Claudia

2016-01-01

This paper studies the relation between the trading activity of market participants and the volatility of the European Emission Allowance price during Phase I of the European Union Emission Trading System (EU ETS). We focus on the contrasting roles of different trader types. We find evidence of a positive and significant trading activity–volatility relation, which appears to be stronger when accounting for trader type. The positive relation can be mainly attributed to energy providers. In contrast, industrial companies seem to have traded more frequently when volatility levels were lower. Finally, the non-liable players, represented by financial intermediaries, appear to have acted as a flexible counterparty, trading more with the energy sector when volatility was higher, and more with the industrial firms when volatility was lower. We discuss possible explanations for these contrasted positions. Understanding the trading activity–volatility link is relevant for evaluating the efficiency of the EU ETS. Although the relation is generally positive, many players remained often inactive and traded mostly when volatility levels were lower. Policies targeting the engagement of less active players could lead to a smoother incorporation of information into prices and to an increase in market efficiency. - Highlights: • We study the permit price volatility–trading activity link in the EU ETS Phase I. • We focus on the contrasting roles of different market players. • We show that the relation was overall positive, mainly due to energy providers. • Many other players remained inactive and traded more when volatility was lower. • Policies for the engagement of less active traders could increase market efficiency.

Carbon emission trading system of China: a linked market vs. separated markets

Science.gov (United States)

Liu, Yu; Feng, Shenghao; Cai, Songfeng; Zhang, Yaxiong; Zhou, Xiang; Chen, Yanbin; Chen, Zhanming

2013-12-01

The Chinese government intends to upgrade its current provincial carbon emission trading pilots to a nationwide scheme by 2015. This study investigates two of scenarios: separated provincial markets and a linked inter-provincial market. The carbon abatement effects of separated and linked markets are compared using two pilot provinces of Hubei and Guangdong based on a computable general equilibrium model termed Sino-TERMCo2. Simulation results show that the linked market can improve social welfare and reduce carbon emission intensity for the nation as well as for the Hubei-Guangdong bloc compared to the separated market. However, the combined system also distributes welfare more unevenly and thus increases social inequity. On the policy ground, the current results suggest that a well-constructed, nationwide carbon market complemented with adequate welfare transfer policies can be employed to replace the current top-down abatement target disaggregation practice.

The trading game : emissions trading schemes offer pollution as a market commodity

Energy Technology Data Exchange (ETDEWEB)

Bradbury, D.

2005-07-01

This paper discussed the market mechanisms for emissions trading. The concept emerged in signatory countries to the Kyoto Protocol in response to their commitment to reduce greenhouse gas (GHG) emissions. Emissions trading systems allow large polluters to buy and sell pollution credits in order to meet emission reduction targets. While member states in the European Union (EU) started trading in February 2005, Canada is still developing its own proposal that will be introduced in 2008 to correspond with the first phase of the Kyoto Protocol. In contrast to the European model that places absolute limits on GHG emissions, the Canadian system is intensity-based. Heavy polluters, known as large final emitters, will have to cut emissions of the 6 GHGs covered under the Kyoto Protocol as a percentage of their total industrial output. Companies that reduce their emissions more than their defined targets can trade the surplus as credits on the open domestic market. It was argued that this allows businesses to meet their own emissions targets while failing to contribute effectively to Canada's overall Kyoto target. In addition, in order to lessen the burden to industry, Canada has imposed a $15 cap on the price of credits, which is in contrast to the European system. It was argued that businesses in Europe will be more motivated to meet their targets because of the higher value on European pollution credits. With less onus on business in Canada to reduce absolute targets, the burden of reducing GHG emissions has shifted to federal taxpayers. The paper addressed some of the factors that led to Canada's decision to use an intensity-based system. One main factor was the refusal of the United States to ratify the Kyoto Protocol and the cost disadvantage this would create for Canadian firms. However, some argue that by paying more attention to energy use, companies can reduce emissions and increase shareholder value by achieving cost savings that are greater than the

Carbon auctions, energy markets and market power: An experimental analysis

International Nuclear Information System (INIS)

Dormady, Noah C.

2014-01-01

This paper provides an experimental analysis of a simultaneous energy-emissions market under conditions of market power. The experimental design employs real-world institutional features; including stochastic demand, permit banking, inter-temporal (multi-round) dynamics, a tightening cap, and resale. The results suggest that dominant firms can utilize energy-emissions market linkages to simultaneously inflate the price of energy and suppress the price of emissions allowances. Whereas under prior market designs, regulators were concerned with dominant firms exercising their market power over the emissions market to exclude rivals and manipulate the permit market by hoarding permits; the results of this paper suggest that this strategy is less profitable to dominant firms in contemporary auction-based markets than strategic capacity withholding in the energy market and associated demand reduction in the emissions market. - Highlights: • Laboratory simulation of joint energy-emissions market. • Evaluates market power under collusion and real-world institutional features. • Dominant firms can exercise market power to inflate energy prices. • Dominant firms can exercise market power to suppress emissions prices. • Supply withholding is an implicit demand reduction in the emissions market

Allowable carbon emissions for medium-to-high mitigation scenarios

Energy Technology Data Exchange (ETDEWEB)

Tachiiri, Kaoru; Hargreaves, Julia C.; Annan, James D.; Kawamiya, Michio [Research Inst. for Global Change, Japan Agency for Marine-Earth Science and Technology, Yokohama, (Japan)], e-mail: tachiiri@jamstec.go.jp; Huntingford, Chris [Centre for Ecology and Hydrology, Wallingford (United Kingdom)

2013-11-15

Using an ensemble of simulations with an intermediate complexity climate model and in a probabilistic framework, we estimate future ranges of carbon dioxide (CO{sub 2}) emissions in order to follow three medium-high mitigation concentration pathways: RCP2.6, RCP4.5 and SCP4.5 to 2.6. Uncertainty is first estimated by allowing modelled equilibrium climate sensitivity, aerosol forcing and intrinsic physical and biogeochemical processes to vary within widely accepted ranges. Results are then constrained by comparison against contemporary measurements. For both constrained and unconstrained projections, our calculated allowable emissions are close to the standard (harmonised) emission scenarios associated with these pathways. For RCP4.5, which is the most moderate scenario considered in terms of required emission abatement, then after year 2100 very low net emissions are needed to maintain prescribed year 2100 CO{sub 2} concentrations. As expected, RCP2.6 and SCP4.5 to 2.6 require more strict emission reductions. The implication of this is that direct sequestration of carbon dioxide is likely to be required for RCP4.5 or higher mitigation scenarios, to offset any minimum emissions for society to function (the 'emissions floor'). Despite large uncertainties in the physical and biogeochemical processes, constraints from model-observational comparisons support a high degree of confidence in predicting the allowable emissions consistent with a particular concentration pathway. In contrast the uncertainty in the resulting temperature range remains large. For many parameter sets, and especially for RCP2.6, the land will turn into a carbon source within the twenty first century, but the ocean will remain as a carbon sink. For land carbon storage and our modelling framework, major reductions are seen in northern high latitudes and the Amazon basin even after atmospheric CO{sub 2} is stabilised, while for ocean carbon uptake, the tropical ocean regions will be a

Impacts of alternative allowance allocation methods under a cap-and-trade program in power sector

International Nuclear Information System (INIS)

Liu Beibei; He Pan; Zhang Bing; Bi Jun

2012-01-01

Emission trading is considered to be a cost-effective environmental economic instrument for pollution control. However, the policy design of an emission trading program has a decisive impact on its performance. Allowance allocation is one of the most important policy design issues in emission trading, not only for equity but also for policy performance. In this research, an artificial market for sulfur dioxide (SO 2 ) emission trading was constructed by applying an agent-based model. The performance of the Jiangsu SO 2 emission trading market was examined under different allowance allocation methods and transaction costs. The results showed that the market efficiency of emission trading would be affected by the allocation methods when the transaction costs are positive. The auction allowance allocation method was more efficient and had the lowest total emission control costs than the other three allocation methods examined. However, the use of this method will require that power plants pay for all of their allowance, and doing so will increase the production costs of power plants. On the other hand, output-based allowance allocation is the second best method. - Highlights: ► The impact of allowance allocation methods is examined for a cap-and-trade program. ► The market efficiency would be distinct when the transaction costs are positive. ► The auction method would have lowest total emission control costs.

Market power in the market for greenhouse gas emission permits - the interplay with the fossil fuel markets

International Nuclear Information System (INIS)

Hagem, Cathrine; Maestad, Ottar

2002-01-01

Implementation of the Kyoto Protocol is likely to leave Russia and other Eastern European countries with market power in the market for emission permits. Ceteris paribus, this will raise the permit price above the competitive permit price. However, Russia is also a large exporter of fossil fuels. A high price on emission permits may lower the producer price on fossil fuels. Thus, if Russia co-ordinates its permit market and fossil fuel market policies, market power will not necessarily lead to a higher permit price. Fossil fuel producers may also exert market power in the permit market, provided they conceive the permit price to be influenced by their production volumes. If higher volumes drive up the permit price Russian fuel producers may become more aggressive relative to their competitors in the fuel markets. If the sale of fuels is co-ordinated with the sale of permits. The result is reversed if high fuel production drives the permit price down. (Author)

Market power in the market for greenhouse gas emission permits - the interplay with the fossil fuel markets

Energy Technology Data Exchange (ETDEWEB)

Hagem, Cathrine; Maestad, Ottar

2002-07-01

Implementation of the Kyoto Protocol is likely to leave Russia and other Eastern European countries with market power in the market for emission permits. Ceteris paribus, this will raise the permit price above the competitive permit price. However, Russia is also a large exporter of fossil fuels. A high price on emission permits may lower the producer price on fossil fuels. Thus, if Russia co-ordinates its permit market and fossil fuel market policies, market power will not necessarily lead to a higher permit price. Fossil fuel producers may also exert market power in the permit market, provided they conceive the permit price to be influenced by their production volumes. If higher volumes drive up the permit price Russian fuel producers may become more aggressive relative to their competitors in the fuel markets. If the sale of fuels is co-ordinated with the sale of permits. The result is reversed if high fuel production drives the permit price down. (Author)

Potential impact of (CET) carbon emissions trading on China's power sector: A perspective from different allowance allocation options

International Nuclear Information System (INIS)

Cong, Rong-Gang; Wei, Yi-Ming

2010-01-01

In Copenhagen climate conference China government promised that China would cut down carbon intensity 40-45% from 2005 by 2020. CET (carbon emissions trading) is an effective tool to reduce emissions. But because CET is not fully implemented in China up to now, how to design it and its potential impact are unknown to us. This paper studies the potential impact of introduction of CET on China's power sector and discusses the impact of different allocation options of allowances. Agent-based modeling is one appealing new methodology that has the potential to overcome some shortcomings of traditional methods. We establish an agent-based model, CETICEM (CET Introduced China Electricity Market), of introduction of CET to China. In CETICEM, six types of agents and two markets are modeled. We find that: (1) CET internalizes environment cost; increases the average electricity price by 12%; and transfers carbon price volatility to the electricity market, increasing electricity price volatility by 4%. (2) CET influences the relative cost of different power generation technologies through the carbon price, significantly increasing the proportion of environmentally friendly technologies; expensive solar power generation in particular develops significantly, with final proportion increasing by 14%. (3) Emission-based allocation brings about both higher electricity and carbon prices than by output-based allocation which encourages producers to be environmentally friendly. Therefore, output-based allocation would be more conducive to reducing emissions in the Chinese power sector. (author)

Assessment of emission trading impacts on competitive electricity market price

DEFF Research Database (Denmark)

Singh, S.N.; Saxena, D.; Østergaard, Jacob

2011-01-01

analyzes the impact of electricity prices in the competitive electricity markets having a uniform market clearing price mechanism. Findings - It is found that the electricity prices depend on the system loading, generation mix, etc. at a particular hour. Various emission trading instruments are discussed...... side emission trading impact on electricity prices in the competitive power market. Design/methodology/approach - Various schemes are suggested and are being implemented to achieve this objective. It is expected that electricity price will increase due to imposition of emission taxes. This paper...... with a special emphasis on the European market. Research limitations/implications - Block bidding of the suppliers is considered whereas the demand is assumed to be inelastic. Originality/value - The emission trading impacts are analyzed on a simple example....

An impact assessment of electricity and emission allowances pricing in optimised expansion planning of power sector portfolios

International Nuclear Information System (INIS)

Tolis, Athanasios I.; Rentizelas, Athanasios A.

2011-01-01

Highlights: → The impact of electricity and CO 2 allowance pricing in power sector is researched. → A stochastic programming approach without recourse is used for the optimisation. → Higher electricity prices may be proportionally beneficial for the power system. → The CO 2 allowance prices may be inversely proportionate with the expected yields. → High CO 2 allowance prices are inhibitors for conventional technology projects. -- Abstract: The present work concerns a systematic investigation of power sector portfolios through discrete scenarios of electricity and CO 2 allowance prices. The analysis is performed for different prices, from regulated to completely deregulated markets, thus representing different electricity market policies. The modelling approach is based on a stochastic programming algorithm without recourse, used for the optimisation of power sector economics under multiple uncertainties. A sequential quadratic programming routine is applied for the entire investigation period whilst the time-dependent objective function is subject to various social and production constraints, usually confronted in power sectors. The analysis indicated the optimal capacity additions that should be annually ordered from each competitive technology in order to substantially improve both the economy and the sustainability of the system. It is confirmed that higher electricity prices lead to higher financial yields of power production, irrespective of the CO 2 allowance price level. Moreover, by following the proposed licensing planning, a medium-term reduction of CO 2 emissions per MW h by 30% might be possible. Interestingly, the combination of electricity prices subsidisation with high CO 2 allowance prices may provide favourable conditions for investors willing to engage on renewable energy markets.

A Note on Market Power in an Emission Permits Market with Banking

International Nuclear Information System (INIS)

Liski, M.; Montero, J.P.

2005-01-01

In this paper, we investigate the effect of market power on equilibrium path of an emission permits market in which firms can bank current permits for use in later periods. In particular, we study the market equilibrium for a large (potentially dominant) firm and competitive fringe with rational expectations. We characterize the equilibrium solution for different permits allocations and discuss the large firms stock-holding constraints needed for credible market manipulation

Developments in the emissions trading market 2009; Utvecklingen paa utslaeppsraettsmarknaden 2009

Energy Technology Data Exchange (ETDEWEB)

Bohnstedt, Sophie; Karlberg, Marie; Myrman, Johanna

2010-07-01

The Energy Agency has analyzed the development of emissions trading within the EU and globally in 2009. The analysis relates to larger events which mainly affected the prices and traded volumes during the year. The analysis includes the market for European emissions, markets for the project-based mechanisms, development of trade with the assigned emission units (AAUs), the unregulated market and developments in other trading in the world. The report is based on existing studies and monitoring of markets development during January to November 2009

Energy market reform and greenhouse gas emission reductions

International Nuclear Information System (INIS)

Anon.

1999-01-01

The report reviews micro-economic reform in the energy market and measures the impact that energy market reform is expected to have on greenhouse gas outcomes. It indicates that reform in the electricity and gas industries is delivering what was promised, an efficient market with lower energy prices and, over the longer term, will deliver a gradually reducing rate of greenhouse gas emissions per unit of energy produced. It also recognises that energy market reform has removed some barriers to the entry of less greenhouse gas intense fuels. These trends will result in reduced greenhouse gas intensity in the supply of energy and significant reductions in the growth in greenhouse gas emissions compared to what may have been expected without the reforms

Emissions impacts of wind and energy storage in a market environment.

Science.gov (United States)

Sioshansi, Ramteen

2011-12-15

This study examines the emissions impacts of adding wind and energy storage to a market-based electric power system. Using Texas as a case study, we demonstrate that market power can greatly effect the emissions benefits of wind, due to most of the coal-fired generation being owned by the two dominant firms. Wind tends to have less emissions benefits when generators exercise market power, since coal-fired generation is withheld from the market and wind displaces natural gas-fired generators. We also show that storage can have greater negative emissions impacts in the presence of wind than if only storage is added to the system. This is due to wind increasing on- and off-peak electricity price differences, which increases the amount that storage and coal-fired generation are used. We demonstrate that this effect is exacerbated by market power.

Developing Markets for Zero-Emission Vehicles in Goods Movement

Science.gov (United States)

2018-03-01

This report evaluates the market status and potential freight market penetration of zero emission vehicles (ZEVs) and near ZEVs in the medium and heavy duty class within the California market. It evaluates alternative technologies, primarily battery ...

Emissions trading with offset markets and free quota allocations

Energy Technology Data Exchange (ETDEWEB)

Rosendahl, Knut Einar; Strand, Jon

2012-07-01

We study interactions between a 'policy bloc's' emissions quota market and an offset market where emissions offsets can be purchased from a non-policy 'fringe' of countries (such as for the CDM under the Kyoto Protocol). Policy-bloc firms are assumed to benefit from free quota allocations that are updated according to either past emissions or past outputs. We show that both overall abatement, and the allocation of given abatement between the policy bloc and the fringe, tend to be inefficient. When the policy-bloc quota market and offset markets are fully integrated (and firms buy offsets directly from the fringe), and all quotas and offsets must be traded at a single price, it is optimal for the policy bloc to either not constrain the offset market whatsoever, or to ban offsets completely. The former (latter) case occurs when free allocation of quotas is not too generous (very generous), and the offset market can profitably deliver large (only a small) quota amounts. Governments of policy countries would however instead prefer to buy offsets directly from the fringe at a price below the policy-bloc quota price. The offset price will then be below the marginal damage cost of emissions, and the quota price in the policy bloc above marginal damage cost. This solution is also inefficient as the policy bloc (acting as a monopsonist) purchases too few offsets from the fringe.(Author)

Regional allocation of CO2 emissions allowance over provinces in China by 2020

International Nuclear Information System (INIS)

Wang, Ke; Zhang, Xian; Wei, Yi-Ming; Yu, Shiwei

2013-01-01

The mitigation efforts of China are increasingly important for meeting global climate target since the rapid economic growth of China has led to an increasing share in the world's total CO 2 emissions. This paper sets out to explore the approach for realizing China's national mitigation targets submitted to the UNFCCC as part of the Copenhagen Accord; that is, to reduce the intensity of CO 2 emissions per unit of GDP by 40–45% by 2020, as well as reducing the energy intensity and increasing the share of non-fossil fuel consumption, through regional allocation of emission allowance over China's provinces. Since the realization of China's mitigation target essentially represents a total amount emission allowance allocation problem, an improved zero sum gains data envelopment analysis optimization model, which could deal with the constant total amount resources allocation, is proposed in this study. By utilizing this model and based on several scenarios of China's economic growth, CO 2 emissions, and energy consumption, a new efficient emission allowance allocation scheme on provincial level for China by 2020 is proposed. The allocation results indicate that different provinces have to shoulder different mitigation burdens in terms of emission intensity reduction, energy intensity reduction, and share of non-fossil fuels increase. - Highlights: ► We explore the approach to realize national CO 2 emissions reduction target of China by 2020. ► The CO 2 emissions allowance is allocated over China's 30 administrative regions. ► Several scenarios of China's regional economy, emission, energy consumption are given. ► The zero sum gains data envelopment analysis model is applied in emission allowance allocation. ► An efficient emission allowance allocation scheme on provincial level is proposed

Emission trading scheme: market analysis and forecasting scenarios

International Nuclear Information System (INIS)

Clo, Stefano

2006-01-01

This article offers an economic analysis of the Emission Trading Scheme (ETS) and its institutional framework; we introduce an economic model able to simulate some possible market price's scenarios. The aim of this article is to offer a better market fundamentals' comprehension and to help economic agents building their expectations about market's development [it

Policy design and performance of emissions trading markets: an adaptive agent-based analysis.

Science.gov (United States)

Bing, Zhang; Qinqin, Yu; Jun, Bi

2010-08-01

Emissions trading is considered to be a cost-effective environmental economic instrument for pollution control. However, the pilot emissions trading programs in China have failed to bring remarkable success in the campaign for pollution control. The policy design of an emissions trading program is found to have a decisive impact on its performance. In this study, an artificial market for sulfur dioxide (SO2) emissions trading applying the agent-based model was constructed. The performance of the Jiangsu SO2 emissions trading market under different policy design scenario was also examined. Results show that the market efficiency of emissions trading is significantly affected by policy design and existing policies. China's coal-electricity price system is the principal factor influencing the performance of the SO2 emissions trading market. Transaction costs would also reduce market efficiency. In addition, current-level emissions discharge fee/tax and banking mechanisms do not distinctly affect policy performance. Thus, applying emissions trading in emission control in China should consider policy design and interaction with other existing policies.

The oil market and international agreements on CO2 emissions

International Nuclear Information System (INIS)

Berger, K.; Fimreite, Oe.; Golombek, R.; Hoel, M.

1991-01-01

In order to avoid a relatively large risk of dramatic adverse climatic changes during the next century, greenhouse gas emissions must be reduced significantly relative to present emissions. CO 2 is the most important greenhouse gas, so any international agreement will certainly cover CO 2 emissions. Any international agreement to reduce emissions of CO 2 is going to have a significant impact on the markets for fossil fuels. The analysis shows that is not only the amount of CO 2 emissions permitted in an agreement which matters for fossil fuel prices, but also the type of agreement. Two obvious forms of agreements, which under certain assumptions both are cost efficient, are (a) tradeable emission permits, and (b) an international CO 2 tax. If the fossil fuel markets were perfectly competitive, these two types of agreements would have the same effect on the producer price of fossil fuels. However, fossil fuel markets are not completely competitive. It is shown that, under imperfect competition, direct regulation of the ''tradeable quotas'' type tends to imply higher producer prices than an international CO 2 tax giving the same total CO 2 emissions. A numerical illustration of the oil market indicates that the difference in producer prices for the two types of CO 2 agreements is quite significant. 6 refs., 2 figs., 1 tab

The surveillance of the electricity wholesale market and emission trading market

International Nuclear Information System (INIS)

Luedemann, Volker

2015-01-01

The Regulation on Wholesale Market Integrity and Transparency (REMIT) and the German Law on the Establishment of a Market Transparency Office for Wholesale Trade in Electricity and Gas (MTS-G) have fundamentally changed the surveillance of electricity wholesale trade in Germany. From now on the Federal Network Agency and the Federal Cartel Office will be jointly responsible for monitoring the electricity wholesale trade for suspicious market phenomena and abusive behaviour. The REMIT specifies that the electricity trade must be surveilled ''with due consideration to interactions'' with the emission trade system. However, occurrences observed in recent years have shown that the emission trading system is in need of reform. This has also been recognised and has prompted extensive corrective action by the regulatory authorities of the European Union. These changes have yet to be transposed into the national surveillance regimes. The present article explains why the new role accorded to the Federal Network Agency under the REMIT fails to eliminate the structural shortcomings of the old surveillance system. At least the decision to put the collection and evaluation of data exclusively in the hands of the market transparency office and the cooperation this will prompt between the supervisory authorities responsible will make the task of surveilling the energy wholesale trading market a lot easier for the authorities. The energy transition and its exigencies will yet lead to further changes in the market and its surveillance regime.

Emission allowances and mitigation costs of China and India resulting from different effort-sharing approaches

International Nuclear Information System (INIS)

Ruijven, Bas J. van; Weitzel, Matthias; den Elzen, Michel G.J.; Hof, Andries F.; Vuuren, Detlef P. van; Peterson, Sonja; Narita, Daiju

2012-01-01

To meet ambitious global climate targets, mitigation effort in China and India is necessary. This paper presents an analysis of the scientific literature on how effort-sharing approaches affect emission allowances and abatement costs of China and India. We find that reductions for both China and India differ greatly in time, across- and within approaches and between concentration stabilisation targets. For China, allocated emission allowances in 2020 are substantially below baseline projections. Moreover, they may be below 2005 emission levels, particularly for low concentration targets (below 490 ppm CO 2 -eq). Effort-sharing approaches based on allocating reduction targets lead to relatively lower reductions for China than approaches that are based on allocating emission allowances. For 2050, emission allowances for China are 50–80% below 2005 levels for low concentration targets with minor differences between approaches. Still, mitigation costs of China (including emissions trading) remain mostly below global average. According to literature, Chinese emission allowances peak before 2025–2030 for low concentration targets. India’s emission allowances show high increases compared to 2005 levels. If emission trading is allowed, financial revenues from selling credits might compensate mitigation costs in most approaches, even for low concentration targets. India’s emission allowances peak around 2030–2040 for all concentration targets.

Mastering the market of CO2 emission quotas

International Nuclear Information System (INIS)

2004-05-01

On January 1, 2005, a system of trade of carbon dioxide emission quotas, also called 'market of tradable emission permits', will be implemented in the European Union. This system is one of the 3 flexibility mechanisms foreseen by the Kyoto protocol in order to reduce the global economic cost of the fight against climatic change. The aim of this seminar is to clarify the process of transfer of the European directive into French law. It comprises 8 presentations dealing with: the objectives of tradable emission quotas (greenhouse effect, Kyoto commitments, short and long term stakes); presentation of the European directive about the trade system of greenhouse gas emissions; transposition of the directive into French law (fields of application, sectors and facilities concerned, possible exemptions, first national plan of quotas allocation); voluntary emission abatement commitments by industrial companies member of the AERES; quotas recording and management, control of trades; companies strategy (investment for CO 2 abatement or purchase of quotas, impact on industries and competitiveness); experience feedback of emission quotas trading in foreign countries (international CO 2 market development); CO 2 emission quotas linked with cogeneration (emissions from cogeneration facilities, possible allocation, impact for cogeneration companies, approaches in other European countries in this domain); perspectives and conclusions. (J.S.)

The oil market and international agreements on CO2 emissions

International Nuclear Information System (INIS)

Berger, K.; Fimreite, O.; Golombek, R.; Hoel, M.

1992-01-01

According to most scientists, greenhouse gas emissions must be reduced significantly relative to current trends to avoid dramatic adverse climatic changes during the next century. CO 2 is the most important greenhouse gas, so any international agreement will certainly cover CO 2 emissions. Any international agreement to reduce emissions of CO 2 is going to have a significant impact on the markets for fossil fuels. The analysis shows that it is not only the amount of CO 2 emissions permitted in an agreement which matters for fossil fuel prices, but also the type of agreement. Two obvious forms of agreements, which under certain assumptions both are cost efficient, are (a) tradeable emission permits, and (b) an international CO 2 tax. If the fossil fuel markets were perfectly competitive, these two types of agreements would have the same effect on the producer price of fossil fuels. However, fossil fuel markets are not completely competitive. It is shown that, under imperfect competition, direct regulation of the 'tradeable quotas' type tends to imply higher producer prices and a larger efficiency loss than an international CO 2 tax giving the same total CO 2 emissions. A numerical illustration of the oil market indicates that the difference in producer prices for the two types of CO 2 agreements is quite significant. 6 refs., 2 figs., 2 tabs

International markets for greenhouse gas emission reduction policies - possibilities for integrating developing countries

DEFF Research Database (Denmark)

Halsnæs, K.; Olhoff, A.

2005-01-01

Greenhouse gas (GHG) emissions are affecting a global common: the climate, and as a global environmental problem with a public good character it provides attractive opportunities for minimising control costs through the use of emission trading markets. This paper introduces cost and benefit princ...... principles that can be applied to the assessment of global markets for GHG emission reduction options and evaluates the scope for and the potential economic gains of such markets.......Greenhouse gas (GHG) emissions are affecting a global common: the climate, and as a global environmental problem with a public good character it provides attractive opportunities for minimising control costs through the use of emission trading markets. This paper introduces cost and benefit...

Influence of the Emissions Trading Scheme on generation scheduling

International Nuclear Information System (INIS)

Kockar, Ivana; McDonald, James R.; Conejo, Antonio J.

2009-01-01

The paper investigates the effects of emissions constraints and Emissions Trading Scheme (ETS) on the generation scheduling outcome. ETS is a cap-and-trade market mechanism that has been introduced in European Union in order to facilitate CO 2 emissions management. This scheme gives generators certain amount of CO 2 allowances which they can use to cover emissions produced during energy generation. In a current setting, most of the allowances are given for free. However, under ETS generators also have an opportunity to buy and sell CO 2 allowances on the market. Since generation power outputs are bounded by the amount of CO 2 emissions that they are allowed to produce over time, it is becoming increasingly important for generating units to manage their allocations in the most profitable way and decide when and how much of permissions to spent to produce electricity. The method proposed here allows for modeling of this new limitation by including costs of buying and selling of CO 2 allowance in the generation scheduling procedure. It also introduces additional emissions constraints in the problem formulation. Although CO 2 permissions and energy are traded in separate markets, the proposed formulation permits analysis on how emission caps and emission market prices can influence market outcome. The method is illustrated on a 5-unit system. Given examples compare (i) a base-case when all generators have made a decision to use portions of their total free allocations that do not cause any shortfall during the investigated time period; (ii) two cases when the least expensive generators' decisions on the amount of free allowances they are willing to use during the considered period are insufficient. In all cases generators also submit prices at which they expect to be able to ''top-up'' or sell allowances on the market, however, only in the second and third case the ''buying'' option becomes active and affects generation scheduling and total costs. In addition, the

Emissions Trading

NARCIS (Netherlands)

Woerdman, Edwin; Backhaus, Juergen

2014-01-01

Emissions trading is a market-based instrument to achieve environmental targets in a cost-effective way by allowing legal entities to buy and sell emission rights. The current international dissemination and intended linking of emissions trading schemes underlines the growing relevance of this

EU emission trading scheme and the effect on the price of electricity

International Nuclear Information System (INIS)

2004-01-01

The Electricity Market Working Group and the Climate Change Policy Working Group of the Nordic Council of Ministers, has commissioned ECON Analysis to prepare this report. The report analyses the demand and supply of GHG emission allowances and the price of emission allowances for the period 2005-2007 and 2008-2012 and the effect on the electricity price in the Nordic electricity market. The demand for emissions allowances has then been estimated for different scenarios, with different assumption on burden sharing between sectors and international participation and the supply of emission allowances is determined by the marginal abatement costs. Based on available information on abatement costs the supply of allowances is then estimated. The market balance between the demand and supply for allowances then determines the price of emission allowances. The effect on the electricity price is simulated with ECON's model for the Nordic power market to quantitatively estimate the effect from emissions trading on the electricity price, production, consumption, trade, etc. (BA)

Impacts on CO2 Emission Allowance Prices in China: A Quantile Regression Analysis of the Shanghai Emission Trading Scheme

Directory of Open Access Journals (Sweden)

Jie Zhang

2016-11-01

Full Text Available A pilot regional carbon emission trading scheme (ETS has been implemented in China for more than two years. An investigation into the impacts of different factors on carbon dioxide (CO2 emission allowance prices provides guidance for price-making in 2017 when the nation-wide ETS of China will be established. This paper adopts a quantile regression approach to estimate the impacts of different factors in Shanghai emission trading scheme (SH-ETS, namely, economic growth, energy prices and temperature. The empirical analysis shows that: (i the economic growth in Shanghai leads to a drop in the carbon allowance prices; (ii the oil price has a slightly positive effect on the allowance prices regardless of the ordinary least squares (OLS or quantile regression method; (iii a long-run negative relationship exists between the coal price and the Shanghai emission allowances (SHEA prices, but a positive interaction under different quantiles, especially the 25%–50% quantiles; (iv temperature has a significantly positive effect at the 20%–30% quantiles and a conspicuous negative impact at the right tail of the allowances prices.

Emission reduction trading - a power marketer`s perspective

Energy Technology Data Exchange (ETDEWEB)

Stewart, M. [Powerex Inc., Vancouver, BC (Canada)

1999-10-01

The current situation , and the short-term and long-term outlook in emission reduction trading are reviewed from the point of view of a power marketer. The author`s view is that while the concept of emission reduction credit (ERC) is easy enough to understand, i.e. a series of measures to reduce carbon dioxide production and enhance carbon sequestration, there is no standard definition, although there are a number of models under consideration. What is being sought is clear ownership and title, a clear understanding of what qualifies as a credit, credit for early action, commodity specifications and the ability to hedge. The author predicts that in the short-tem, industry will experiment with different types of transactions to gain experience and seek partners who are willing to share risk and development cost. In the longer-term, emission reduction credits will be bought and sold as commodities and traded, swapped or exchanged as part of a portfolio in bilateral trade transactions, and used in hedging against future liabilities.

Economic impact assessment and operational decision making in emission and transmission constrained electricity markets

International Nuclear Information System (INIS)

Nanduri, Vishnu; Kazemzadeh, Narges

2012-01-01

Highlights: ► We develop a bilevel game-theoretic model for allowance and electricity markets. ► We solve the model using a reinforcement learning algorithm. ► Model accounts for transmission constraints, cap-and-trade constraints. ► Study demonstrated on 9-bus electric power network. ► Obtain insights about supply shares, impact of transmission constraints, and cost pass through. -- Abstract: Carbon constrained electricity markets are a reality in 10 northeastern states and California in the US, as well as the European Union. Close to a Billion US Dollars have been spent by entities (mainly generators) in the Regional Greenhouse Gas Initiative in procuring CO 2 allowances to meet binding emissions restrictions. In the near future, there are expected to be significant impacts due to the cap-and-trade program, especially when the cap stringency increases. In this research we develop a bilevel, complete-information, matrix game-theoretic model to assess the economic impact and make operational decisions in carbon-constrained restructured electricity markets. Our model is solved using a reinforcement learning approach, which takes into account the learning and adaptive nature of market participants. Our model also accounts for all the power systems constraints via a DC-OPF problem. We demonstrate the working of the model and compute various economic impact indicators such as supply shares, cost pass-through, social welfare, profits, allowance prices, and electricity prices. Results from a 9-bus power network are presented.

EU effect: Exporting emission standards for vehicles through the global market economy.

Science.gov (United States)

Crippa, M; Janssens-Maenhout, G; Guizzardi, D; Galmarini, S

2016-12-01

Emission data from EDGAR (Emissions Database for Global Atmospheric Research), rather than economic data, are used to estimate the effect of policies and of the global exports of policy-regulated goods, such as vehicles, on global emissions. The results clearly show that the adoption of emission standards for the road transport sector in the two main global markets (Europe and North America) has led to the global proliferation of emission-regulated vehicles through exports, regardless the domestic regulation in the country of destination. It is in fact more economically convenient for vehicle manufacturers to produce and sell a standard product to the widest possible market and in the greatest possible amounts. The EU effect (European Union effect) is introduced as a global counterpart to the California effect. The former is a direct consequence of the penetration of the EURO standards in the global markets by European and Japanese manufacturers, which effectively export the standard worldwide. We analyze the effect on PM 2.5 emissions by comparing a scenario of non-EURO standards against the current estimates provided by EDGAR. We find that PM 2.5 emissions were reduced by more than 60% since the 1990s worldwide. Similar investigations on other pollutants confirm the hypothesis that the combined effect of technological regulations and their diffusion through global markets can also produce a positive effect on the global environment. While we acknowledge the positive feedback, we also demonstrate that current efforts and standards will be totally insufficient should the passenger car fleets in emerging markets reach Western per capita figures. If emerging countries reach the per capita vehicle number of the USA and Europe under current technological conditions, then the world will suffer pre-1990 emission levels. Copyright © 2016 Elsevier Ltd. All rights reserved.

Simulating greenhouse gas (GHG) allowance cost and GHG emission reduction in Western Europe

International Nuclear Information System (INIS)

Delarue, Erik; Lamberts, Hans; D'haeseleer, William

2007-01-01

Due to the growing concern for global warming, the EU25 have implemented the European Union Greenhouse Gas Emission Trading Scheme (EU ETS). In the first trading period (2005-2007), part of the targeted GHG emission reductions presumably will have to result from a switch from coal fired electricity generation to gas fired electricity generation. It is possible to calculate the allowance cost necessary to switch a certain coal fired plant with a certain gas fired plant in the merit order. The allowance cost obtained is a so called switching point. When comparing historic European Union Allowance (EUA) prices (2005) with the corresponding historic switching points, the EUA prices were found high enough to cause a certain switch in the summer season. This finding leads to the use of switching points in establishing allowance cost profiles for several scenarios. A variable gas price profile is used in the simulation tool E-Simulate to simulate electricity generation and related GHG emissions in an eight zonal model representing Western Europe. Several GHG allowance cost profile scenarios are examined. For each scenario, electricity generation in the considered countries is clarified. The focus however lies on the GHG emission reduction potentials. These potentials are addressed for each scenario

Reducing greenhouse gas emissions: a duopoly market pricing competition and cooperation under the carbon emissions cap.

Science.gov (United States)

Jian, Ming; He, Hua; Ma, Changsong; Wu, Yan; Yang, Hao

2017-05-17

This article studies the price competition and cooperation in a duopoly that is subjected to carbon emissions cap. The study assumes that in a departure from the classical Bertrand game, there is still a market for both firms' goods regardless of the product price, even though production capacity is limited by carbon emissions regulation. Through the decentralized decision making of both firms under perfect information, the results are unstable. The firm with the lower maximum production capacity under carbon emissions regulation and the firm with the higher maximum production capacity both seek market price cooperation. By designing an internal carbon credits trading mechanism, we can ensure that the production capacity of the firm with the higher maximum production capacity under carbon emissions regulation reaches price equilibrium. Also, the negotiation power of the duopoly would affect the price equilibrium.

18 CFR 2.25 - Ratemaking treatment of the cost of emissions allowances in coordination transactions.

Science.gov (United States)

2010-04-01

... the cost of emissions allowances in coordination transactions. 2.25 Section 2.25 Conservation of Power... § 2.25 Ratemaking treatment of the cost of emissions allowances in coordination transactions. (a... Commission provides for recovery of variable costs on an incremental basis, the Commission will allow...

Combating global warming. Possible rules, regulations and administrative arrangements for a global market in CO2 emission entitlements

International Nuclear Information System (INIS)

1994-12-01

When in 1991 the UNCTAD secretariat launched its research into the idea of controlling carbon dioxide emissions through a system of 'tradeable permits', there was little support for this approach. Some felt that the idea was premature and should not detract from efforts to introduce more conventional measures, such as environmental taxes and new regulations. However, in a few short years, the idea of using tradeable market-based instruments to combat global warming has gained widespread acceptance. The UNCTAD secretariat's 1992 study on a global system of tradeable carbon emission entitlements (UNCTAD/RDP/DFP/1), was widely regarded as a major breakthrough in this area. This study argued that tradeable permits were both an efficient means of controlling man-made carbon dioxide emissions at minimum cost, and an effective mechanism for transferring resources to developing countries and countries in transition, to help them to contribute to the international effort to abate emissions of greenhouse gases. The study contained a detailed assessment of key technical elements of a tradeable CO 2 entitlements system, including permit allocation techniques, resource transfers, equity/distributional implications, institutional and administrative requirements. The present publication explores the institutional requirements for both policy-making and the organization of a global market in CO 2 emission allowances. It shows that one can start with a simple pilot scheme based on the joint implementation of commitments, which constitutes the cornerstone of the Framework Convention, and evolve gradually to a more complete system on the basis of 'learning by doing'. Since the use of markets can dramatically lower the cost of controlling greenhouse gas emissions, it is clearly in the self-interest of major emitters to act as 'market leaders' willing to pioneer

For sale: Sulfur emissions

International Nuclear Information System (INIS)

Heiderscheit, J.

1992-01-01

The allowance trading market has started a slow march to maturity. Competitive developers should understand the risks and opportunities now presented. The marketplace for sulfur dioxide (SO 2 ) emissions allowances - the centerpiece of Title 4's acid rain reduction program - remains enigmatic 19 months after the Clean Air Act amendments of 1990 were passed. Yet it is increasingly clear that the emission allowance market will likely confound the gloom and doom of its doubters. The recently-announced $10 million dollar Wisconsin Power and Light allowance sales to Duquesne Light and the Tennessee Valley Authority are among the latest indications of momentum toward a stabilizing market. This trend puts additional pressure on independent developers to finalize their allowance strategies. Developers who understand what the allowance trading program is and what it is not, know the key players, and grasp the unresolved regulatory issues will have a new competitive advantage. The topics addressed in this article include the allowance marketplace, marketplace characteristics, the regulatory front, forward-looking strategies, and increasing marketplace activity

Public Interest vs. Interest Groups: Allowance Allocation in the EU Emission Trading Scheme

Energy Technology Data Exchange (ETDEWEB)

Anger, Niels; Oberndorfer, Ulrich (Centre for European Economic Research, Mannheim (Germany)); Boehringer, Christoph (Carl von Ossietzky Univ., Oldenburg (Germany))

2008-07-01

We assess the political-economy determinants of allowance allocation in the EU Emissions Trading Scheme (EU ETS). A common-agency model suggests that the government considers the preferences of sectoral interest groups when allocating emissions permits, so that industries with a more powerful lobby face a lower regulatory burden. An empirical analysis of the first trading phase of the EU ETS corroborates our theoretical prediction, but also reveals that the political-economy determinants of permit allocation are more complex. Employing instrumental-variable estimation technique, we find that large carbon emitters that were represented by powerful interest groups received higher levels of emissions allowances

Cooperative Emissions Trading Game: International Permit Market Dominated by Buyers.

Science.gov (United States)

Honjo, Keita

2015-01-01

Rapid reduction of anthropogenic greenhouse gas emissions is required to mitigate disastrous impacts of climate change. The Kyoto Protocol introduced international emissions trading (IET) to accelerate the reduction of carbon dioxide (CO2) emissions. The IET controls CO2 emissions through the allocation of marketable emission permits to sovereign countries. The costs for acquiring additional permits provide buyers with an incentive to reduce their CO2 emissions. However, permit price has declined to a low level during the first commitment period (CP1). The downward trend in permit price is attributed to deficiencies of the Kyoto Protocol: weak compliance enforcement, the generous allocation of permits to transition economies (hot air), and the withdrawal of the US. These deficiencies created a buyer's market dominated by price-making buyers. In this paper, I develop a coalitional game of the IET, and demonstrate that permit buyers have dominant bargaining power. In my model, called cooperative emissions trading (CET) game, a buyer purchases permits from sellers only if the buyer forms a coalition with the sellers. Permit price is determined by bargaining among the coalition members. I evaluated the demand-side and supply-side bargaining power (DBP and SBP) using Shapley value, and obtained the following results: (1) Permit price is given by the product of the buyer's willingness-to-pay and the SBP (= 1 - DBP). (2) The DBP is greater than or equal to the SBP. These results indicate that buyers can suppress permit price to low levels through bargaining. The deficiencies of the Kyoto Protocol enhance the DBP, and contribute to the demand-side dominance in the international permit market.

Carbon emission allowance allocation with a mixed mechanism in air passenger transport.

Science.gov (United States)

Qiu, Rui; Xu, Jiuping; Zeng, Ziqiang

2017-09-15

Air passenger transport carbon emissions have become a great challenge for both governments and airlines because of rapid developments in the aviation industry in recent decades. In this paper, a mixed mechanism composed of a cap-and-trade mechanism and a carbon tax mechanism is developed to assist governments in allocating carbon emission allowances to airlines operating on the routes. Combined this mixed mechanism with an equilibrium strategy, a bi-level multi-objective model is proposed for an air passenger transport carbon emission allowance allocation problem, in which a government is considered as a leader and the airlines as the followers. An interactive solution approach integrating a genetic algorithm and an interactive evolutionary mechanism is designed to search for satisfactory solutions of the proposed model. A case study is then presented to show its practicality and efficiency in mitigating carbon emissions. Sensitivity analyses under different tradable and taxable levels are also conducted, which can give the government insights as to the tradeoffs between lowering carbon intensity and improving airlines' operations. The computational results demonstrate that the mixed mechanism can assist greatly in carbon emission mitigation for air passenger transport and therefore, it should be established as part of air passenger transport carbon emission policies. Copyright © 2017 Elsevier Ltd. All rights reserved.

Forecasting the Allocation Ratio of Carbon Emission Allowance Currency for 2020 and 2030 in China

Directory of Open Access Journals (Sweden)

Shihong Zeng

2016-07-01

Full Text Available Many countries and scholars have used various strategies to improve and optimize the allocation ratios for carbon emission allowances. This issue is more urgent for China due to the uneven development across the country. This paper proposes a new method that divides low-carbon economy development processes into two separate periods: from 2020 to 2029 and from 2030 to 2050. These two periods have unique requirements and emissions reduction potential; therefore, they must involve different allocation methods, so that reduction behaviors do not stall the development of regional low-carbon economies. During the first period, a more deterministic economic development approach for the carbon emission allowance allocation ratio should be used. During the second period, more adaptive and optimized policy guidance should be employed. We developed a low-carbon economy index evaluation system using the entropy weight method to measure information filtering levels. We conducted vector autoregressive correlation tests, consulted 60 experts for the fuzzy analytic hierarchy process, and we conducted max-min standardized data processing tests. This article presents first- and second-period carbon emission allowance models in combination with a low-carbon economy index evaluation system. Finally, we forecast reasonable carbon emission allowance allocation ratios for China for the periods starting in 2020 and 2030. A good allocation ratio for the carbon emission allowance can help boost China’s economic development and help the country reach its energy conservation and emissions reduction goals.

Tradeable emission permits regulations in the presence of imperfectly competitive product markets. Welfare implications

International Nuclear Information System (INIS)

Sartzetakis, E.S.

1997-01-01

In the present paper, we analyse the interaction of a competitive market for emission permits with an oligopolistic product market. It is well known that a competitive permits market achieves the cost minimizing distribution of abatement effort among the polluting firms for a given reduction in emissions. However, when the product market is oligopolistic, it may redistribute production inefficiently among firms. It has been suggested that this inefficiency can outweigh the gains obtained from using emission permits instead of command and control. Although this argument is clearly correct under full information, it is shown in the present paper that it reverses under incomplete information. In particular, it is shown that when tradeable emission permits are specified according to the standard textbook example, they yield higher social welfare than the command and control regulation. 1 fig., 2 appendices, 11 refs

Interactions between carbon and power markets in transition

NARCIS (Netherlands)

Richstein, J.C.

2015-01-01

In this research, several improvements to the European Union Emissions Trading System (EU ETS) were analysed. The EU ETS is a market for emission allowances and the European Union's main instrument for reducing greenhouse gas emissions (of which CO2 is the main component). However, the CO2 allowance

To market, to market

International Nuclear Information System (INIS)

Lieberman, J.I.

1992-01-01

Senator Lieberman and three fellow members of Congress introduced the CO 2 Offset Policy Efficiency Act (COPE), which incorporates the use of marketable permits to reduce CO 2 emissions. For COPE to be fully effective, however, several key criteria must be met: (1) establishing initial baselines will be critical to ensure that emission reductions are credited properly; (2) accurate plant-by-plant monitoring must be in place to ensure that claimed reductions have actually occurred; (3) the program must include a strong enforcement provision to prevent evasion and to punish violators with substantial automatic fines. COPE imposes a sanction equal to roughly four times the estimated cost of offsets; the sanctions would be paid before enforcement proceedings commence. The urgency and complexity of global warming requires us to break with the past and develop new ways of delaying with pollution, Senator Lieberman feels by giving the market a chance to work on behalf of the environment, the sale of emission allowance will reduce CO 2 emissions in the most-efficient cost-effective way possible

The greenhouse gases emissions allowances trading in the Czech Republic

International Nuclear Information System (INIS)

Chemisinec, Igor; Marvan, Miroslav; Tuma, Jiri

2006-01-01

The energy policy of the State is very important for a state development. The aim of this policy is power energy development, which is essential for improving the quality of life and standards of people's living in every country. Unfortunately, power energy development also has a negative impact; primarily on the environment. Some possible solutions exist for reduction of the power energy negative impacts. This paper deals with reduction of greenhouse gases (GHG) emissions in the Czech Republic according to the Kyoto protocol to the United Nations Framework Convention climate change. The ultimate objective of the United Nations Framework Convention on Climate Change is to achieve stabilization of greenhouse gas concentrations in the atmosphere. The GHG emissions allowances trading as one of the instruments for stabilisation of GHG emissions is described in the paper. (authors)

Econometric analysis of Australian emissions markets and electricity prices

International Nuclear Information System (INIS)

Cotton, Deborah; De Mello, Lurion

2014-01-01

Emissions trading schemes aim to reduce the emissions in certain pollutants using a market based scheme where participants can buy and sell permits for these emissions. This paper analyses the efficiency of the two largest schemes in Australia, the NSW Greenhouse Gas Abatement Scheme and the Mandatory Renewable Energy Trading Scheme, through their effect on the electricity prices from 2004 to 2010. We use a long run structural modelling technique for the first time on this market. It provides a practical long-run approach to structural relationships which enable the determination of the effectiveness of the theoretical expectations of these schemes. The generalised forecast error variance decomposition analysis finds that both schemes' emissions prices have little effect on electricity prices. Generalised impulse response function analysis support this finding indicating that when shocks are applied to electricity by the two schemes it returns to equilibrium very quickly. This indicates that these schemes are not having the effect anticipated in their legislation. - Highlights: • We analyse two emissions trading schemes in Australia. • We test for their effect on wholesale electricity prices. • The test uses generalised forecast error variance decomposition analysis. • The tests find long run relationship between the variables in both the samples. • The short run-dynamics indicate that they play a minimal role in electricity prices

The role of emission permits and the uncertainty of a market power on the wholesale electricity markets. The capacity retention strategy

International Nuclear Information System (INIS)

Rousse, O.

2008-01-01

The wholesale electricity markets are theoretically inherently incomplete and imperfectly competitive. This aspect is confirmed by the various empirical demonstrations of horizontal market power exercising by the capacity retention strategy. In this article, we focus on the impact of implementing an emission permit market for this type of strategy. We show that under some circumstances, the existence of emission permits can provide additional incentives to electricity producers wanting to withhold capacity. Our thinking relies partly on the concept that uncertain of prices and future needs in terms of emission permits, firms can be encouraged to retain more permits in their portfolio to ensure additional flexibility and achieve high profits in the future. (author)

Using Market Forces to Reduce Greenhouse Gas Emissions Through Product-Level Life Cycle Analysis and Eco-Labeling

Science.gov (United States)

Sweeney, J. F.; Davis, S. J.

2007-12-01

Established protocols allow entity-level accounting of greenhouse gas (GHG) emissions. The information contained within GHG inventories is used by entities to manage their carbon footprint and to anticipate future exposure to compulsory GHG markets or taxes. The efficacy of such inventories, as experienced by the consumer, can be improved upon by product-level GHG inventories applying the methods of traditional life cycle analysis (LCA). A voluntary product-level assessment of this type, coupled with an eco-label, would 1) empower consumers with information about the total embodied GHG content of a product, 2) allow companies to understand and manage GHG emissions outside the narrow scope of their entities, and 3) drive reduction of GHG emissions throughout product value chains. The Climate Conservancy (TCC) is a non-profit organization founded to help companies calculate their GHG emissions at the level of individual product units, and to inform consumers about the GHG intensity of the products they choose to purchase. With the assistance of economists, policy experts and scientists, TCC has developed a useful metric for reporting product-level GHG emissions that allows for a normalized comparison of a product's GHG intensity irrespective of industry sector or competitors, where GHG data are often unavailable or incomplete. Using this metric, we envision our Climate Conscious label becoming an important arbiter of choice for consumers seeking ways to mitigate their climate impacts without the need for governmental regulation.

Conditional transfer of emission rights. Not a good idea

International Nuclear Information System (INIS)

Van Engelen, Th.C.J.A.

2004-01-01

The Dutch government embraces the idea that trading of emission allowances is a useful way of reducing the emission of harmful gasses. In the current plans to amend the Environmental Management Act, however, the legislator has chosen for a system where allowances may only be transferred in accordance with strict conditions. These conditions do not provide a legal framework for an efficient emission allowances trading market. As a result, Dutch industry will potentially be placed in an unfavourable position. The legislator, it is suggested, should opt for fully transferable allowances. It is crucial that an efficient international market for trading in allowances is established. This means that it should be possible to trade these allowances easily, without excessive legal restrictions. The aim of the legislator is to prevent extreme situations in this market. While its concerns are valid, however, the legislator has missed the mark by choosing a system whereby transfer of allowances is subject to excessive conditions. The legal consequence of not fulfilling one or more of the conditions during the sale is that the allowance will not be legally transferred, and the seller will remain the proprietor of the allowance, without either the seller or the buyer being aware of the situation. It is clear that this would be an unworkable situation as it would not be possible from a practical angle to simply and quickly check previous transactions. Overall, this would result in high transactions costs, which in turn would be a barrier to an efficient market. In summary, an efficient market in emission allowances seems to be an illusion if the transfer of allowances are subject to such conditions as are presently envisaged by the law. It is suggested that the legislator can reach its goals by dropping the conditions for transfers and by supervising the transactions through administrative and criminal procedures instead. This will not affect the owners-hip of emission allowances

Climate, energy and emissions trading

International Nuclear Information System (INIS)

Baron, R.; Philibert, C.

2007-01-01

The authors question the 4 main concerns that have arisen since the implementation of emission trade markets 3 years ago. First, the allowance policy was not accurate enough and has led to a surplus offer of CO 2 allowances. Secondly, the impact on electricity prices of carbon emission costs was all the higher as it happened at the moment of the deregulation of electricity markets. Thirdly, the CO 2 allowances whose price will near 14 euros a ton for the 2008-2012 period are accused of hindering the competitiveness of the European industrial sector. Fourth, the present allowance system that gives to new comers free CO 2 allowances is not very conducive to the adoption by these new comers of technologies that are less CO 2 emitting. Some ways of improvement are given. (A.C.)

The Impact of Emissions Trading on the Price of Electricity in Nord Pool : Market Power and Price Determination in the Nordic Electricity Market

OpenAIRE

Oranen, Anna

2006-01-01

The objective of this thesis is to find out how dominant firms in a liberalised electricity market will react when they face an increase in the level of costs due to emissions trading, and how this will effect the price of electricity. The Nordic electricity market is chosen as the setting in which to examine the question, since recent studies on the subject suggest that interaction between electricity markets and emissions trading is very much dependent on conditions specific to each market ...

How vulnerable is the emissions market to transaction costs?: An ABMS Approach

International Nuclear Information System (INIS)

Lee, Kangil; Han, Taek-Whan

2016-01-01

The impact of transaction costs on the early emissions trading market is examined by applying an agent-based model and simulation (ABMS) approach. For a realistic model set up, bounded rationality, stochastic characteristics, and learning-by-doing are considered in our search processes. Marginal abatement cost parameters are obtained from Yoo et al. (2010), which is an experimental study on the emissions trading in the Korean power sector. Sensitivity analyses are performed on market performance indices with regard to transaction cost parameters, which represent scales and the learning elasticities of transaction costs. A total of 960 simulations were run in this sensitivity analysis. Sensitivity analysis results consistently show that higher transaction costs worsen market performance. The most remarkable finding in these results is that welfare performance of all the transactions decreases by up to 50% as the scale parameters of transaction costs increase, implying that welfare gain from introducing emissions trading disappears significantly. However, with learning curve effect, welfare performance could be regained by up to 26%. In sum, although transaction costs significantly encroach upon trade gains at the early stage, based on our simulation results, the welfare loss by way of transaction costs is lessened as the knowledge of market participants progresses. - Highlights: • Impact of transaction costs on small and early, primitive emissions trading market • Bounded Rationality (BR) and Zero Intelligence Plus (ZIP) agents concept • Marginal Abatement Cost (MAC) parameters delineate Korean power companies • With transaction costs, welfare gain from trade found to be shrunken • As learning proceeds, welfare loss is reduced

Why taxes don't distort emissions trading

International Nuclear Information System (INIS)

Thomas, M.T.

1994-01-01

Observers of the emission allowance market, noting the relatively few trades to date, fear that utilities have been deterred by the tax consequences. Their thinking runs like this: Because allocated allowances carry a zero-cost tax basis, the proceeds from sale are fully taxable and the utility receives only the after-tax value. On the other hand, if the utility banks allowances and uses them for compliance on its own plant, it realizes its entire investment. Thus, market price comparisons for emissions allowances should be adjusted to reflect this tax penalty. This argument may sounds plausible, but as a general rule it's not true

Analysis and Design of International Emission Trading Markets Applying System Dynamics Techniques

Science.gov (United States)

Hu, Bo; Pickl, Stefan

2010-11-01

The design and analysis of international emission trading markets is an important actual challenge. Time-discrete models are needed to understand and optimize these procedures. We give an introduction into this scientific area and present actual modeling approaches. Furthermore, we develop a model which is embedded in a holistic problem solution. Measures for energy efficiency are characterized. The economic time-discrete "cap-and-trade" mechanism is influenced by various underlying anticipatory effects. With a systematic dynamic approach the effects can be examined. First numerical results show that fair international emissions trading can only be conducted with the use of protective export duties. Furthermore a comparatively high price which evokes emission reduction inevitably has an inhibiting effect on economic growth according to our model. As it always has been expected it is not without difficulty to find a balance between economic growth and emission reduction. It can be anticipated using our System Dynamics model simulation that substantial changes must be taken place before international emissions trading markets can contribute to global GHG emissions mitigation.

Banking behavior under uncertainty: Evidence from the US Sulfur Dioxide Emissions Allowance trading program

International Nuclear Information System (INIS)

Rousse, Olivier; Sevi, Benoit

2006-02-01

The aim of this paper is to examine portfolio management of emission allowances in the US Sulfur Dioxide Emissions Allowance Trading Program, to determine whether utilities have a real motive to bank when risk increases. We test a theoretical model linking the motivation of the firm to accumulate permits in order to prepare itself to face a risky situation in the future. Empirical estimation using data for years 2001 to 2004 provides evidence of a relationship between banking behavior and uncertainty the utility is facing with. (authors)

Magnetic emission ranking of electrical appliances. A comprehensive market survey

International Nuclear Information System (INIS)

Leitgeb, N.; Cech, R.; Schroettner, J.; Lehofer, P.; Schmidpeter, U.; Rampetsreiter, M.

2008-01-01

Over the last decades emissions of magnetic fields from electric appliances have considerably changed. Based on a comprehensive market survey it could be shown that today magnetic emissions are usually characterised by complex frequency spectra while single-frequency emissions have become rare. Therefore, spectral assessment procedures play a critical role. Compared to frequency-weighted equivalent magnetic induction, rms values may underestimate emissions up to two orders of magnitudes. Therefore, rms measurements are not suitable and emission-ranking lists of devices need revision. Surface hot-spot measurements at nominal load conditions and 230 V/50 Hz supply involved 1146 new electrical devices of 166 different categories. High emissions were not rare. Magnetic emissions of devices of 73 different categories exceeded reference levels up to almost two orders of magnitudes above reference levels. Maximum values were higher than reported so far. Magnetic emissions were high enough to make even conformity with existing basic restrictions not self-evident. (authors)

The surveillance of the electricity wholesale market and emission trading market; Die Ueberwachung von Stromgrosshandelsmarkt und Emissionshandelsmarkt

Energy Technology Data Exchange (ETDEWEB)

Luedemann, Volker [Hochschule Osnabrueck (Germany). Forschungszentrum Energiewirtschaft/Energierecht (fee); Hochschule Osnabrueck (Germany). Wirtschafts- und Wettbewerbsrecht; Konar, Selma [Sozietaet Becker Buettner Held, Muenchen (Germany)

2015-05-15

The Regulation on Wholesale Market Integrity and Transparency (REMIT) and the German Law on the Establishment of a Market Transparency Office for Wholesale Trade in Electricity and Gas (MTS-G) have fundamentally changed the surveillance of electricity wholesale trade in Germany. From now on the Federal Network Agency and the Federal Cartel Office will be jointly responsible for monitoring the electricity wholesale trade for suspicious market phenomena and abusive behaviour. The REMIT specifies that the electricity trade must be surveilled ''with due consideration to interactions'' with the emission trade system. However, occurrences observed in recent years have shown that the emission trading system is in need of reform. This has also been recognised and has prompted extensive corrective action by the regulatory authorities of the European Union. These changes have yet to be transposed into the national surveillance regimes. The present article explains why the new role accorded to the Federal Network Agency under the REMIT fails to eliminate the structural shortcomings of the old surveillance system. At least the decision to put the collection and evaluation of data exclusively in the hands of the market transparency office and the cooperation this will prompt between the supervisory authorities responsible will make the task of surveilling the energy wholesale trading market a lot easier for the authorities. The energy transition and its exigencies will yet lead to further changes in the market and its surveillance regime.

EMISSIONS FROM INDIRECT LAND USE CHANGE: DO THEY MATTER WITH FUEL MARKET LEAKAGES?

Directory of Open Access Journals (Sweden)

Dušan Drabik

2013-09-01

Full Text Available Indirect land use change, an agricultural market leakage, has been a major controversy over the Environmental Protection Agency’s (EPA requirement for corn-ethanol to reduce greenhouse gas (GHG emissions by 20 percent relative to gasoline it is assumed to replace. This paper shows that corn-ethanol policies generate far greater carbon leakage in the fuel market itself. Hence, corn-ethanol does not meet EPA’s threshold, regardless of ethanol policy and whether one includes emissions from land use change.

Industry protests new emissions trading regime

International Nuclear Information System (INIS)

Berends, J.; Schyns, V.

2008-01-01

The new emissions trading proposals presented by the European Commission on January 23rd, 2008, threaten to seriously hamper the competitiveness of European industry in the global market, according to industry organizations. They demand radical changes in the way Brussels allocates emission allowances. It is stated that auctioning of allowances, as the Commission proposes, will drive industry and employment out of Europe

Dynamic Interaction between Cap & Trade and Electricity Markets

Science.gov (United States)

Jeev, Kumar

Greenhouse Gases (GHG), such as Carbon-Dioxide (CO2), which is released in the atmosphere due to anthropogenic activities like power production, are now accepted as the main culprits for global warming. The Regional Greenhouse Gas Initiative (RGGI), an initiative of the North East and Mid-Atlantic States of the United States (US) for limiting the emission of GHG, has developed a regional cap-and-trade program for CO2 emissions for power plants. Existing cap-and-trade programs in US and Europe for Greenhouse Gases have recently been plagued by over-allocation. Carbon prices recently collapsed in all these markets during the global recession. Since then, there have been significant policy changes, which have resulted in the adoption of aggressive emission cap targets by most major carbon emission markets. This is expected to make carbon emissions availability more restrictive, raising the prices of these credits. These emissions markets are expected to have a major impact on the wholesale electricity markets. Two models to study the interaction of these two markets are presented. These models assess the impact of the emissions market on wholesale electricity prices. The first model characterizes the competition between two types of power plants (coal and gas) in both the electricity and emissions markets as a dynamic game using the Cournot approximation. Under this approximation, we find that in the Nash equilibrium the plants increase their permit allocation to high-demand periods and the marginal value of each credit for a plant is identical in all periods under their optimal equilibrium strategy. The second numerical model allows us to explicitly evaluate the closed loop equilibrium of the dynamic interaction of two competitors in these markets. We find that plants often try to corner the market and push prices all the way to the price cap. Power plants derive most of their profits from these extreme price regimes. In the experiments where trading is allowed

The EU Emissions Trading Scheme. Allowance Prices, Trade Flows, Competitiveness Effects

International Nuclear Information System (INIS)

Klepper, G.; Peterson, S.

2004-03-01

The upcoming European Emissions Trading Scheme (ETS) is one of the more controversial climate policy instruments. Predictions about its likely impact and its performance can at present only be made to a certain degree. As long as the National Allocations Plans are not finally settled the overall supply of allowances is not determined. In this paper we will identify key features and key impacts of the EU ETS by scanning the range of likely allocation plans using the simulation model DART. The analysis of the simulation results highlights a number of interesting details in terms of allowance trade flows between member countries, of allowance prices, and in terms of the role of the accession countries in the ETS

Proceedings of the Emissions trading conference : effective strategies for successful emissions trading in a global market

International Nuclear Information System (INIS)

2001-01-01

There is growing interest everywhere in the topic of emissions trading in order to meet the commitments made under the Kyoto Protocol. During this conference, most aspects of emissions trading were discussed, ranging from the need to establish credible emission reduction estimates to the means of achieving those goals, to the trading activities of Ontario Power Generation in the field of emissions trading both at the domestic and the international level. There were presentations that focussed on greenhouse gas policies, markets and strategic plays, and the preparation for the regulation of greenhouse gas. An emissions trading regime for Canada was examined by one of the presenters. This conference provided a useful venue for all stakeholders to discuss various strategies and ideas related to emissions trading. Speakers represented governments, the private sector and utilities, as well as the National Round Table on the Environment and the Economy. tabs., figs

Air Markets Program Data (AMPD)

Data.gov (United States)

U.S. Environmental Protection Agency — The Air Markets Program Data tool allows users to search EPA data to answer scientific, general, policy, and regulatory questions about industry emissions. Air...

Carbon trading thickness and market efficiency

International Nuclear Information System (INIS)

Montagnoli, Alberto; De Vries, Frans P.

2010-01-01

This note tests for the efficient market hypothesis (EMH) in the market for CO 2 emission allowances in Phase I and Phase II of the European Union Emissions Trading Scheme (EU ETS). As usually is the case in emerging and non-competitive markets such as the EU ETS, trading often not occurs on a frequent basis. This has adverse implications for both the gains from permit trade as well as biases the EMH tests. Variance ratio tests are employed to adjust for the thin trading effect. The results indicate that Phase I - the trial and learning period - was inefficient, whereas the first period under Phase II shows signs of restoring market efficiency. (author)

Impacts and mitigation of excess diesel-related NOx emissions in 11 major vehicle markets

Science.gov (United States)

Anenberg, Susan C.; Miller, Joshua; Minjares, Ray; Du, Li; Henze, Daven K.; Lacey, Forrest; Malley, Christopher S.; Emberson, Lisa; Franco, Vicente; Klimont, Zbigniew; Heyes, Chris

2017-05-01

Vehicle emissions contribute to fine particulate matter (PM2.5) and tropospheric ozone air pollution, affecting human health, crop yields and climate worldwide. On-road diesel vehicles produce approximately 20 per cent of global anthropogenic emissions of nitrogen oxides (NOx), which are key PM2.5 and ozone precursors. Regulated NOx emission limits in leading markets have been progressively tightened, but current diesel vehicles emit far more NOx under real-world operating conditions than during laboratory certification testing. Here we show that across 11 markets, representing approximately 80 per cent of global diesel vehicle sales, nearly one-third of on-road heavy-duty diesel vehicle emissions and over half of on-road light-duty diesel vehicle emissions are in excess of certification limits. These excess emissions (totalling 4.6 million tons) are associated with about 38,000 PM2.5- and ozone-related premature deaths globally in 2015, including about 10 per cent of all ozone-related premature deaths in the 28 European Union member states. Heavy-duty vehicles are the dominant contributor to excess diesel NOx emissions and associated health impacts in almost all regions. Adopting and enforcing next-generation standards (more stringent than Euro 6/VI) could nearly eliminate real-world diesel-related NOx emissions in these markets, avoiding approximately 174,000 global PM2.5- and ozone-related premature deaths in 2040. Most of these benefits can be achieved by implementing Euro VI standards where they have not yet been adopted for heavy-duty vehicles.

Impacts and mitigation of excess diesel-related NOx emissions in 11 major vehicle markets.

Science.gov (United States)

Anenberg, Susan C; Miller, Joshua; Minjares, Ray; Du, Li; Henze, Daven K; Lacey, Forrest; Malley, Christopher S; Emberson, Lisa; Franco, Vicente; Klimont, Zbigniew; Heyes, Chris

2017-05-25

Vehicle emissions contribute to fine particulate matter (PM 2.5 ) and tropospheric ozone air pollution, affecting human health, crop yields and climate worldwide. On-road diesel vehicles produce approximately 20 per cent of global anthropogenic emissions of nitrogen oxides (NO x ), which are key PM 2.5 and ozone precursors. Regulated NO x emission limits in leading markets have been progressively tightened, but current diesel vehicles emit far more NO x under real-world operating conditions than during laboratory certification testing. Here we show that across 11 markets, representing approximately 80 per cent of global diesel vehicle sales, nearly one-third of on-road heavy-duty diesel vehicle emissions and over half of on-road light-duty diesel vehicle emissions are in excess of certification limits. These excess emissions (totalling 4.6 million tons) are associated with about 38,000 PM 2.5 - and ozone-related premature deaths globally in 2015, including about 10 per cent of all ozone-related premature deaths in the 28 European Union member states. Heavy-duty vehicles are the dominant contributor to excess diesel NO x emissions and associated health impacts in almost all regions. Adopting and enforcing next-generation standards (more stringent than Euro 6/VI) could nearly eliminate real-world diesel-related NO x emissions in these markets, avoiding approximately 174,000 global PM 2.5 - and ozone-related premature deaths in 2040. Most of these benefits can be achieved by implementing Euro VI standards where they have not yet been adopted for heavy-duty vehicles.

Strategic partitioning of emission allowances under the EU Emission Trading Scheme

Energy Technology Data Exchange (ETDEWEB)

Boehringer, Christoph [Univ. of Oldenburg, Department of Economics, and Centre for European Economic Research (ZEW) (Germany); Rosendahl, Knut Einar [Statistics Norway, Research Department, Pob. 8131 Dep., N-0033 Oslo (Norway)

2009-08-15

The EU Emission Trading Scheme (ETS) is breaking new ground in the experience with emission trading regimes across multiple jurisdictions. Since the EU ETS covers only some industries, it implies a hybrid emission control scheme where EU member states must apply complementary domestic emissions regulation for the non-trading sectors of their economies in order to comply with their national emission reduction targets. The EU ETS thus opens up for strategic partitioning of national emissions budgets by the member states between trading and non-trading sectors. In this paper we examine the potential effects of such strategic behavior on compliance cost and emissions prices. We show that concerns on efficiency losses from strategic partitioning are misplaced. In turn, our analysis implicitly indicates significant political economy forces behind EU climate policy, as both cost-effective and strategically motivated partitioning of national emission budgets are far off from the actual break-down between trading and non-trading sectors. (author)

The construction of Shenzhen's carbon emission trading scheme

International Nuclear Information System (INIS)

Jiang, Jing Jing; Ye, Bin; Ma, Xiao Ming

2014-01-01

The Shenzhen ETS is the first urban-level “cap-and-trade” carbon emissions trading scheme to operate in China. This paper gives an overview of the economic and emissions situation in Shenzhen and focuses on the development of the Shenzhen ETS regulatory framework. It is devised as an ETS with an intensity-based cap, output-based allocation and a market for trading of allowances. The design of the Shenzhen ETS attaches great importance to coordinate the dynamic relationships between economic growth, industrial transition and emissions control. The cap and its allocation are determined by carbon intensity reduction targets and economic output, with an aim to slow down emissions growth while mitigating shocks from economic fluctuation and industrial adjustment to market stability. The Shenzhen ETS features extensive coverage consisting of three types of regulated entities and four categories of covered emissions, in order to control carbon emissions by both improving energy efficiency and restraining growing energy demand. A competitive game theory method is created for allocation of free allowances to manufacturing enterprises. Mechanisms for carbon offsets and market stabilization are developed to promote active and orderly trading in the carbon market. Moreover, several challenges and their policy choices are detailed for the development of the Shenzhen ETS. - Highlights: • The Shenzhen ETS is the first urban-level “cap-and-trade” carbon emission trading scheme operated in China. • This paper focuses on the construction of Shenzhen carbon emission trading scheme. It is devised as the intensity-based cap, output-based allocation and allowance trade carbon market. • It has some signatures in the general principles, coverage and scope, cap and allocation and other mechanisms. • Several challenges and their policy choices are detailed for the development of Shenzhen ETS

Potential impact of (CET) carbon emissions trading on China’s power sector: A perspective from different allowance allocation options

DEFF Research Database (Denmark)

Cong, Ronggang; Wei, Yi-Ming

2010-01-01

of traditional methods. We establish an agent-based model, CETICEM (CET Introduced China Electricity Market), of introduction of CET to China. In CETICEM, six types of agents and two markets are modeled. We find that: (1) CET internalizes environment cost; increases the average electricity price by 12......In Copenhagen climate conference China government promised that China would cut down carbon intensity 40–45% from 2005 by 2020. CET (carbon emissions trading) is an effective tool to reduce emissions. But because CET is not fully implemented in China up to now, how to design it and its potential......%; and transfers carbon price volatility to the electricity market, increasing electricity price volatility by 4%. (2) CET influences the relative cost of different power generation technologies through the carbon price, significantly increasing the proportion of environmentally friendly technologies; expensive...

Markets for renewable energy and pollution emissions: Environmental claims, emission-reduction accounting, and product decoupling

International Nuclear Information System (INIS)

Moore, Michael R.; Lewis, Geoffrey McD.; Cepela, Daniel J.

2010-01-01

Green electricity generation can provide an indirect route to cleaner air: by displacing generation from fossil fuels, green electricity can reduce emissions of CO 2 and conventional air pollutants. Several types of voluntary markets have emerged in the United States to take advantage of this relationship, including green electricity programs, carbon offsets, and renewable energy certificates. At the same time, regulators are favoring cap-and-trade mechanisms for regulating emissions. This paper describes the appropriate framing of environmental claims for green electricity products. We apply an accounting framework for evaluating claims made for capped pollutants, with entries for emissions, avoided emissions due to green electricity, and unused emission permits. This framework is applied in case studies of two major electric utilities that operate with green electricity programs and capped pollutants. The cases demonstrate that the relative magnitude of 'unused permits' and 'emissions avoided' is a key relationship for evaluating an emissions reduction claim. Lastly, we consider the evolution of the green electricity marketplace given the reliance on cap-and-trade. In this setting, pollution-emission products could be decoupled from one another and from the various green electricity products. Several positive consequences could transpire, including better transparency of products, lower certification costs, and more product choices.

Markets for renewable energy and pollution emissions. Environmental claims, emission-reduction accounting, and product decoupling

Energy Technology Data Exchange (ETDEWEB)

Moore, Michael R.; Cepela, Daniel J. [University of Michigan, MI (United States); Lewis, Geoffrey McD. [University of Waterloo, ON (Canada)

2010-10-15

Green electricity generation can provide an indirect route to cleaner air: by displacing generation from fossil fuels, green electricity can reduce emissions of CO{sub 2} and conventional air pollutants. Several types of voluntary markets have emerged in the United States to take advantage of this relationship, including green electricity programs, carbon offsets, and renewable energy certificates. At the same time, regulators are favoring cap-and-trade mechanisms for regulating emissions. This paper describes the appropriate framing of environmental claims for green electricity products. We apply an accounting framework for evaluating claims made for capped pollutants, with entries for emissions, avoided emissions due to green electricity, and unused emission permits. This framework is applied in case studies of two major electric utilities that operate with green electricity programs and capped pollutants. The cases demonstrate that the relative magnitude of 'unused permits' and 'emissions avoided' is a key relationship for evaluating an emissions reduction claim. Lastly, we consider the evolution of the green electricity marketplace given the reliance on cap-and-trade. In this setting, pollution-emission products could be decoupled from one another and from the various green electricity products. Several positive consequences could transpire, including better transparency of products, lower certification costs, and more product choices. (author)

Markets for renewable energy and pollution emissions: Environmental claims, emission-reduction accounting, and product decoupling

Energy Technology Data Exchange (ETDEWEB)

Moore, Michael R., E-mail: micmoore@umich.ed [University of Michigan, MI (United States); Lewis, Geoffrey McD. [University of Waterloo, ON (Canada); Cepela, Daniel J. [University of Michigan, MI (United States)

2010-10-15

Green electricity generation can provide an indirect route to cleaner air: by displacing generation from fossil fuels, green electricity can reduce emissions of CO{sub 2} and conventional air pollutants. Several types of voluntary markets have emerged in the United States to take advantage of this relationship, including green electricity programs, carbon offsets, and renewable energy certificates. At the same time, regulators are favoring cap-and-trade mechanisms for regulating emissions. This paper describes the appropriate framing of environmental claims for green electricity products. We apply an accounting framework for evaluating claims made for capped pollutants, with entries for emissions, avoided emissions due to green electricity, and unused emission permits. This framework is applied in case studies of two major electric utilities that operate with green electricity programs and capped pollutants. The cases demonstrate that the relative magnitude of 'unused permits' and 'emissions avoided' is a key relationship for evaluating an emissions reduction claim. Lastly, we consider the evolution of the green electricity marketplace given the reliance on cap-and-trade. In this setting, pollution-emission products could be decoupled from one another and from the various green electricity products. Several positive consequences could transpire, including better transparency of products, lower certification costs, and more product choices.

The NOx Budget. Market-based control of tropospheric ozone in the northeastern United States

International Nuclear Information System (INIS)

Farrell, Alex; Carter, Robert; Raufer, Roger

1999-01-01

The NOx Budget is a marketable emissions allowance system currently being adopted by states in the Northeastern US to reduce tropospheric ozone concentrations to healthful levels in a cost-effective manner. Oxides of nitrogen (NOx) are currently regulated within the existing Command and Control (CAC) framework. The introduction of a market-based approach will further reduce emissions, but will not resolve all regulatory uncertainties. These implementation concerns are identified and discussed. Cost savings and emissions reductions patterns which will arise under several different scenarios are determined through the use of a dynamic, relaxed mixed-integer linear programming model of the NOx allowance market. Like other market-based pollution control programs, the NOx Budget is found to be more efficient than CAC options. Restrictions on the market designed to address perceived flaws are found to be expensive but ineffectual

Short-run allocation of emissions allowances and long-term goals for climate policy

NARCIS (Netherlands)

Zetterberg, Lars; Wråke, Markus; Sterner, Thomas; Fischer, Carolyn; Burtraw, Dallas

We use economic analysis to evaluate grandfathering, auctioning, and benchmarking approaches for allocation of emissions allowances and then discuss practical experience from European and American schemes. In principle, auctions are superior from the viewpoints of efficiency, fairness, transparency,

Analyzing interaction of electricity markets and environmental policies using equilibrium models

Science.gov (United States)

Chen, Yihsu

Around the world, the electric sector is evolving from a system of regulated vertically-integrated monopolies to a complex system of competing generation companies, unregulated traders, and regulated transmission and distribution. One emerging challenge faced by environmental policymakers and electricity industry is the interaction between electricity markets and environmental policies. The objective of this dissertation is to examine these interactions using large-scale computational models of electricity markets based on noncooperative game theory. In particular, this dissertation is comprised of four essays. The first essay studies the interaction of the United States Environmental Protection Agency NOx Budget Program and the mid-Atlantic electricity market. This research quantifies emissions, economic inefficiencies, price distortions, and overall social welfare under various market assumptions using engineering-economic models. The models calculate equilibria for imperfectly competitive markets---Cournot oligopoly---considering the actual landscape of power plants and transmission lines, and including the possibility of market power in the NOx allowances market. The second essay extends the results from first essay and models imperfectly competitive markets using a Stackelberg or leader-follower formulation. A leader in the power and NO x markets is assumed to have perfect foresight of its rivals' responses. The rivals' best response functions are explicitly embedded in the leader's constraints. The solutions quantify the extent to which a leader in the markets can extract economic rents on the expense of its followers. The third essay investigates the effect of implementing the European Union (EU) CO2 Emissions Trading Scheme (ETS) on wholesale power prices in the Western European electricity market. This research uses theoretical and computational modeling approaches to quantify the degree to which CO2 costs were passed on to power prices, and quantifies the

ECO2, Emissions Trading Services, development project

International Nuclear Information System (INIS)

Ruokonen, A.

2006-01-01

Emissions Trading started within EU at the beginning of 2005. It caused substantial changes to the business environment of energy companies and energy intensive industry. The planning of Emissions Trading is a complicated process and companies will need consulting, IT systems and other services. Emissions Trading introduces a new factor of production emission allowances, which are tradable commodities. In future, Emissions Trading emissions, emission allowances and the prices of emission allowances have to be considered during the fuel purchasing and the energy production planning. And the best possible knowledge of the own emissions balance and market situation has a monetary value when trading emission allowances. Allocation of emission allowances has done in each country according to National Allocation Plan (NAP), accepted by EU. Finland itself and thus also the Finnish companies will be net buyers of emission allowances in long run. That means commonly that the Finnish companies have to buy more allowances meaning some extra costs to the companies. That's why it is very important to develop and provide to the companies an innovatory emissions planning, follow-up, management and reporting systems. With good emission balance management the extra costs of Emissions Trading will be as low as possible. In ECO2 project, Empower together with Power-Deriva, developed Expert services, Emissions Balance Management and Reporting services and Risk Management services for Emissions Trading and needed software and tools for these services. (orig.)

Introducing CO2 Allowances, Higher Prices For All Consumers; Higher Revenues For Whom?

NARCIS (Netherlands)

Gurkan, G.; Langestraat, R.; Ozdemir, O.

2013-01-01

Abstract Introducing a ceiling on total carbon dioxide (CO2) emissions and allowing polluting industries to buy and sell permits to meet it (known as a cap-and-trade system) affects investment strategies, generation quantities, and prices in electricity markets. In this paper we analyze these

Sorting on the Used-Car Market After the Volkswagen Emission Scandal

OpenAIRE

Strittmatter, Anthony; Lechner, Michael

2017-01-01

The disclosure of the VW emission manipulation scandal caused a quasi-experimental market shock in the observable quality of VW diesel vehicles. We consider a classical model for adverse selection and sorting to derive an empirically testable hypothesis about the impact of observable quality on the supply of used cars. We test the hypothesis with data collected from an online car selling platform which reflects about 50% of the German used-car market. The empirical approach is based on a cond...

The impacts of EU CO2 emissions trading on electricity markets and electricity consumers in Finland

International Nuclear Information System (INIS)

Kara, M.; Syri, S.; Lehtilae, A.; Helynen, S.; Kekkonen, V.; Ruska, M.; Forsstroem, J.

2008-01-01

In this paper, the likely impacts of the EU emission trading system on the Nordic electricity market and on the position of various market actors are assessed. In its first phase, the EU CO 2 emission trading system includes power plants with thermal capacity greater than 20 MW, metals industry, pulp and paper industry, mineral industry and oil refineries. This paper describes the assessment done for the Finnish Minister of Trade and Industry, analysing the likely impacts on power plant operators, on energy-intensive industries, on other industries and on other consumer groups. The impacts of emissions trading were studied with the VTT electricity market model and with the TIMES energy system model. The annual average electricity price was found to rise 0.74 EUR MW h -1 for every 1 Euro tonne CO 2 -1 in the Nordic area. Large windfall profits were estimated to incur to electricity producers in the Nordic electricity market. In Finland, metals industry and private consumers were estimated to be most affected by the electricity market price increases. Expanded nuclear power generation could limit the increases in the prices of electricity to one-third compared to those in the base case

Methodology for the free allocation of emission allowances in the EU ETS post 2012. Sector report for the chemical industry

Energy Technology Data Exchange (ETDEWEB)

NONE

2009-11-15

In 2013, the third trading period of the EU emission trading scheme (EU ETS) will start. With a few exceptions, no free allocation of emission allowances is foreseen in this third trading period for the emissions related to the production of electricity. These emission allowances will be auctioned. For other emissions, transitional free allocation of emission allowances is envisioned. This free allocation will be based on Community wide allocation rules that will, to the extent feasible, be based on ex-ante benchmarks. In 2013, the free allocation is 80% of the quantity determined via these rules, going down to 30% in 2020. An exception is made for activities that are deemed to be exposed to a significant risk of carbon leakage. These activities will receive an allocation of 100% of the quantity determined via the rules. The benchmarks should in principle be calculated for products, i.e. a specific performance per unit productive output, to ensure that they maximize greenhouse gas reductions throughout each production process of the sectors concerned. In this study for the European Commission, a blueprint for a methodology based on benchmarking is developed to determine the allocation rules in the EU ETS from 2013 onwards. In case where benchmarking is not regarded feasible, alternative approaches are suggested. The methodology allows determining the allocation for each EU ETS installation eligible for free allocation of emission allowances. The focus of this study is on preparing a first blueprint of an allocation methodology for free allocation of emission allowances under the EU Emission Trading Scheme for the period 2013-2020 for installations in the refinery industry. The report should be read in conjunction with the report on the project approach and general issues.

Methodology for the free allocation of emission allowances in the EU ETS post 2012. Sector report for the refinery industry

Energy Technology Data Exchange (ETDEWEB)

NONE

2009-11-15

In 2013, the third trading period of the EU emission trading scheme (EU ETS) will start. With a few exceptions, no free allocation of emission allowances is foreseen in this third trading period for the emissions related to the production of electricity. These emission allowances will be auctioned. For other emissions, transitional free allocation of emission allowances is envisioned. This free allocation will be based on Community wide allocation rules that will, to the extent feasible, be based on ex-ante benchmarks. In 2013, the free allocation is 80% of the quantity determined via these rules, going down to 30% in 2020. An exception is made for activities that are deemed to be exposed to a significant risk of carbon leakage. These activities will receive an allocation of 100% of the quantity determined via the rules. The benchmarks should in principle be calculated for products, i.e. a specific performance per unit productive output, to ensure that they maximize greenhouse gas reductions throughout each production process of the sectors concerned. In this study for the European Commission, a blueprint for a methodology based on benchmarking is developed to determine the allocation rules in the EU ETS from 2013 onwards. In case where benchmarking is not regarded feasible, alternative approaches are suggested. The methodology allows determining the allocation for each EU ETS installation eligible for free allocation of emission allowances. The focus of this study is on preparing a first blueprint of an allocation methodology for free allocation of emission allowances under the EU Emission Trading Scheme for the period 2013-2020 for installations in the refinery industry. The report should be read in conjunction with the report on the project approach and general issues.

CO2-emission trading and green markets for renewable electricity. WILMAR - deliverable 4.1

International Nuclear Information System (INIS)

Azuma-Dicke, N.; Weber, C.; Morthorst, P.E.; Ravn, H.F.; Schmidt, R.

2004-06-01

This report is Deliverable 4.1 of the EU project 'Wind Power Integration in Liberalised Electricity Markets' (WILMAR) and de-scribes the application of two policy instruments, Tradable Emissions Permits (TEPs) and Tradable Green Certificates (TGCs) for electricity produced from renewable energy sources in the European Union and the implications for implementation in the Wilmar model. The introduction of a common emission-trading system in the EU is expected to have an upward effect on the spot prices at the electric-ity market. The variations of the spot price imply that some types of power generation may change the situation from earning money to losing money despite the increasing spot price. Heavy restrictions on emissions penalise the fossil-fuelled technologies significantly, and the associated increase in the spot price need not compensate for this. Therefore, a market of TEPs is expected to have a significant influence on the electricity spot price. However, the expected price level of TEPs are met with great uncertainty and a study of a number of economical studies shows a price span between zero and 270 USD per ton of CO 2 depending on the participation or non-participation of countries in the scheme. The price-determination at the TGC market is expected to be closely related to the price at the power spot market as the RE-producers of electricity will have expectations to the total price paid for the energy produced, i.e., for the price of electricity at the spot market plus the price per kWh obtained at the green certificate mar-ket. In the Wilmar model, the TGC market can either be handled exogenously, i.e., the increase in renewable capacity and an average annual TGC price are determined outside the model, or a simple TGC module is developed, including the long-term supply functions for the most relevant renewable technologies and an overall TGC quota. Both solutions are rather simple, but to develop a more advanced model for the TGC market seems to be

Carbon market: to which emission quota to devote?

International Nuclear Information System (INIS)

Chandes, Camille

2013-01-01

As the European Emission Trading Scheme (ETS) is entering its third phase, an article discusses uncertainties and problems regarding this system: CO 2 price is falling down, French industrials do not know which quantity they'll have to buy for their installations, and even some frauds and swindles occurred. Besides the fact that the low level of carbon price is not a motivation for investors, the market is criticised for its imbalance between supply and demand. As some industrials find the costs too high, some sectors may consider off-shoring their activities. Some actors suggest the creation of a central bank of carbon. Countries are using the product of emission bidding in different sectors: housing rehabilitation in France, industry support in Germany, reduction of budget deficit in Italy and Great Britain, construction of passive dwellings in Czech Republic

Kyoto, the oil sands and the GHG emissions market

International Nuclear Information System (INIS)

Vickers, P.

2004-01-01

This paper reviews uncertainties in the oil sands industry in relation to climate change, greenhouse gas emissions and the Kyoto Protocol. Other issues contributing to uncertainties in the industry were also discussed, including water and natural gas issues, refinery capacity and markets, price and exchange rates as well as capital availability and project cost overruns. The potential economic impact of the Kyoto Protocol on oil sands was outlined with prices per barrel. Government regulations were examined in the context of the evolving expectations of the Canadian public. U.S. actions on climate change were examined at the federal and state level. Emissions trading systems were reviewed with reference to a post 2012 regime. The 2005 budget was discussed, along with the Canadian legislative agenda and domestic offsets program, as well as the regulatory agenda in June of 2005. Post 2012 issues were examined, including discussions on the next commitment period, with reference to the fact that there was no support for new commitments among developing countries but that domestic pressures was building in the U.S. for air and climate regulations. Pressures from shareholders and the scientific community were discussed. Emissions trading in the European Union was reviewed. Stabilization goals will mean significant cuts to emissions in order to accommodate growth. Scenario planning and climate change uncertainties were also reviewed. The benefits of scenario planning in complex situations were outlined and were seen to encourage the development of strategic options. Issues concerning environmental stewardship and possible responses by the Unites States were discussed. Three scenarios were outlined: that climate change is not man-made and all the problems will go away; that technology will evolve to accommodate changes; and that policy will be insensitive to the economy, technology will lag and the energy sector will be faced with much higher costs. Various risk management

Greenhouse gas emissions trading: Cogen case studies in the early trading market

International Nuclear Information System (INIS)

Buerer, Mary Jean

2001-01-01

An increasing number of companies are interested in opportunities to trade their reduction in greenhouse gas emissions from cogeneration on the emerging greenhouse gas emissions market. Only the UK and Denmark currently have emissions trading schemes, but they are under development in other European countries. Two frameworks currently exist for trading. Baseline-and-credit trading is used in Canada where companies can take part in two voluntary schemes (Greenhouse Gas Emission Reduction Trading Pilot or Clean Air Canada Inc). An example project from the CHP unit at DuPont's Maitland chemical production facility is given, with details of the baselines and calculations used. The other option is company-wide emissions trading. The example given here features the CHP units at BP's refinery and chemicals operations in Texas. The potential revenue from emission reduction projects could help to boost the economics of cogeneration projects

Green certificates and greenhouse gas emissions certificates - Instruments of the liberalized electricity market in Romania

International Nuclear Information System (INIS)

Matei, Magdalena; Salisteanu, Cornel; Enescu, Diana; Ene, Simona; Matei, Lucian; Marinescu, Mihai

2006-01-01

Governmental Decision No. 443/2003 and GD 1892 / 2004 aimed to the harmonization of the Romanian legislative framework with EU Directive 2001/77/EC which purposes to promote an increasing in the contribution of RES to electricity production in the internal market for electricity. In Romania's case green certificate system was adopted with mandatory quotas for suppliers as a national target for 2010 of 33 % of total consumption to be covered by electricity produced from renewable energy sources. The annual maximum and minimum value for Green Certificates trading is 24 Euro/certificate and 42 Euro/certificate, respectively. Suppliers are obliged to buy yearly a number of Green certificates equal with the mandatory quota multiplied with the amount of electricity sold yearly to their final consumers. The additional price received for the Green Certificates sold is determined on a parallel market, separated from the electricity market, where the environmental benefits of the 'clean' electricity production are traded. The regulator can modify these quotas established by Government Decision when the installed capacity in the power plants which use RES cannot secure the demand of Green Certificates; This system was introduced in November 2005. The number of issued green certificates in 2005 was only 345, so by ANRE Order no. 46 / 2005, the mandatory quota for 2005 was reduced at 2.6% from legal quota established for 2005. In the first month of 2006 5997 Green Certificates were sold at the price of 146 RON. Emissions trading is the most compatible flexible mechanisms of Kyoto Protocol with deregulated electricity markets. The Directive 2003/87/CE referring at CO 2 emission trading within Europe came into force and till 31 March 2004 all the countries had to present to the Commission their national plan to comply with Directive's rules. There is great uncertainty worldwide on how GHG emissions reduction and trading schemes will develop. Previous visions of a single (Kyoto

Analysis of carbon mitigation policies. Feed-in tariffs, energy and carbon price interactions and competitive distortions on carbon markets

Energy Technology Data Exchange (ETDEWEB)

Reichenbach, Johanna

2011-07-19

I study several policy instruments for carbon mitigation with a focus on subsidies for renewable energies, emission taxes and emission allowances. In Chapter 1, I analyze the optimal design and the welfare implications of two policies consisting of an emission tax for conventional fossil-fuel utilities combined with a subsidy for the producers of renewable energy equipment and an emission tax combined with a feed-in tariff for renewable electricity. In Chapter 2 I study the empirical interrelationships between European emission allowance prices and prices for electricity, hard coal and natural gas with an application to portfolio allocation. In Chapters 3 and 4, I discuss several policy-related issues of emissions trading, in particular the potential for market manipulations by firms holding a dominant position in the emission market, the output market or both, and competitive distortions and leakage due to unequal emission regulations across industries, sectors, regions, or countries. (orig.)

Energy and CO2 emissions performance in China's regional economies: Do market-oriented reforms matter?

International Nuclear Information System (INIS)

Lin, Boqiang; Du, Kerui

2015-01-01

This paper employs a newly developed non-radial directional distance function to evaluate China's regional energy and CO 2 emission performance for the period 1997–2009. Moreover, we analyze the impact of China's market-oriented reform on China's regional energy and carbon efficiency. The main findings are as follows. First, most of China's regions did not perform efficiently in energy use and CO 2 emissions. Provinces in the east area generally performed better than those in the central and west areas. By contrast, provinces in the west area generally evidenced the lowest efficiency. Second, Market-oriented reforms, especially the promotion of factor market, were found to have positive effect on the efficiency of energy use and CO 2 emissions. Third, the share of coal in the total energy consumption and the expansion of the industrial sector were found to be negatively correlated with China's regional energy and CO 2 emissions performance. Based on the empirical findings, we provide policy suggestions for enhancing energy and carbon efficiency in China. - Highlights: • A newly developed NDDF are applied to evaluate China's energy and carbon performance. • Most of China's regions did not perform efficiently in energy use and CO 2 emissions. • Market-oriented reforms contributed to improving China's energy and carbon efficiency

CO2-emission trading and green markets for renewable electricity. Wilmar - deliverable 4.1

DEFF Research Database (Denmark)

Azuma-Dicke, N.; Morthorst, Poul Erik; Ravn, H.F.

2004-01-01

This report is Deliverable 4.1 of the EU project “Wind Power Integration in Liberalised Electricity Markets” (WILMAR) and describes the application of two policy instruments, Tradable Emissions Permits (TEP’s) and Tradable Green Certificates (TGC’s) forelectricity produced from renewable energy...... sources in the European Union and the implications for implementation in the Wilmar model. The introduction of a common emission-trading system in the EU is expected to have an upward effect on the spot pricesat the electricity market. The variations of the spot price imply that some types of power...... generation may change the situation from earning money to losing money despite the increasing spot price. Heavy restrictions on emissions penalise thefossil-fuelled technologies significantly, and the associated increase in the spot price need not compensate for this. Therefore, a market of TEP’s is expected...

An emissions trading scheme design for power industries facing price regulation

International Nuclear Information System (INIS)

Kim, Yong-Gun; Lim, Jong-Soo

2014-01-01

The electricity market, monopolistic in nature, with government price regulation, poses a serious challenge for policy makers with respect to the cost-effectiveness of emissions trading, particularly in Asian countries. This paper argues that a cap-and-trade regulatory system for indirect emissions combined with a rate-based allocation system for direct emissions can achieve market efficiency even in the presence of price and quantity controls in the electricity market. This particular policy mix could provide appropriate incentives for industries to reduce their electricity consumption while inducing power producers to reduce their direct carbon emissions cost-effectively in conditions where there is strict government control of electricity prices. Another advantage of the suggested policy mix is that it allows carbon leakage in cross-border power trades to be effectively eliminated. - Highlights: • A rate-based allocation induces power producers to minimize direct emissions. • A cap-and-trade on indirect emission induces firms to reduce electricity consumption. • These two can jointly achieve market efficiency even in the regulated power market

Mechanisms of dust grain charging in plasma with allowance for electron emission processes

Energy Technology Data Exchange (ETDEWEB)

Mol’kov, S. I.; Savin, V. N., E-mail: moped@onego.ru [Petrozavodsk State University (Russian Federation)

2017-02-15

The process of dust grain charging is described with allowance for secondary, ion-induced, photoelectric, and thermal electron emission from the grain surface. The roughness of the grain surface is taken into account. An intermediate charging regime involving ion–atom collisions and electron ionization in the perturbed plasma region is analyzed using the moment equations and Poisson’s equation. A calculation method is proposed that allows one to take into account the influence of all the above effects and determine the radius of the plasma region perturbed by the dust grain.

40 CFR Table 2 to Subpart Tttt of... - Leather Finishing HAP Emission Limits for Determining the Allowable HAP Loss

Science.gov (United States)

2010-07-01

... 40 Protection of Environment 12 2010-07-01 2010-07-01 true Leather Finishing HAP Emission Limits for Determining the Allowable HAP Loss 2 Table 2 to Subpart TTTT of Part 63 Protection of Environment... Finishing HAP Emission Limits for Determining the Allowable HAP Loss As required in § 63.5450, you must meet...

The UK market for gaseous emissions control equipment

Energy Technology Data Exchange (ETDEWEB)

NONE

2000-09-01

The report analyses the changes in demand for gaseous emissions control equipment in the United Kingdom over the next 5 years. It discusses the factors affecting demand such as legislation reporting of environmental performance, and economic factors. It looks at environmental expenditure by UK industry. Markets are examined, for VOC abatement systems; thermal incinerators; adsorption equipment; catalytic oxidisers; absorption equipment; biological treatments; cryogenic equipment; SO{sub x} abatement equipment; wet FGD; wet dry FGD, dry scrubbers; NOx abatement systems; selective catalytic reduction; and selective non-catalytic reduction. Profiles are given of 16 leading suppliers.

Variance risk premia in CO_2 markets: A political perspective

International Nuclear Information System (INIS)

Reckling, Dennis

2016-01-01

The European Commission discusses the change of free allocation plans to guarantee a stable market equilibrium. Selling over-allocated contracts effectively depreciates prices and negates the effect intended by the regulator to establish a stable price mechanism for CO_2 assets. Our paper investigates mispricing and allocation issues by quantitatively analyzing variance risk premia of CO_2 markets over the course of changing regimes (Phase I-III) for three different assets (European Union Allowances, Certified Emissions Reductions and European Reduction Units). The research paper gives recommendations to regulatory bodies in order to most effectively cap the overall carbon dioxide emissions. The analysis of an enriched dataset, comprising not only of additional CO_2 assets, but also containing data from the European Energy Exchange, shows that variance risk premia are equal to a sample average of 0.69 for European Union Allowances (EUA), 0.17 for Certified Emissions Reductions (CER) and 0.81 for European Reduction Units (ERU). We identify the existence of a common risk factor across different assets that justifies the presence of risk premia. Various policy implications with regards to gaining investors’ confidence in the market are being reviewed. Consequently, we recommend the implementation of a price collar approach to support stable prices for emission allowances. - Highlights: •Enriched dataset covering all three political phases of the CO_2 markets. •Clear policy implications for regulators to most effectively cap the overall CO_2 emissions pool. •Applying a cross-asset benchmark index for variance beta estimation. •CER contracts have been analyzed with respect to variance risk premia for the first time. •Increased forecasting accuracy for CO_2 asset returns by using variance risk premia.

40 CFR Table 1 to Subpart Tttt of... - Leather Finishing HAP Emission Limits for Determining the Allowable HAP Loss

Science.gov (United States)

2010-07-01

... 40 Protection of Environment 12 2010-07-01 2010-07-01 true Leather Finishing HAP Emission Limits for Determining the Allowable HAP Loss 1 Table 1 to Subpart TTTT of Part 63 Protection of Environment... Finishing HAP Emission Limits for Determining the Allowable HAP Loss As required in §§ 63.5305 and 63.5340(b...

Emission reduction trading - a power marketer's perspective

Energy Technology Data Exchange (ETDEWEB)

Stewart, M. (Powerex Inc., Vancouver, BC (Canada))

1999-01-01

The current situation , and the short-term and long-term outlook in emission reduction trading are reviewed from the point of view of a power marketer. The author's view is that while the concept of emission reduction credit (ERC) is easy enough to understand, i.e. a series of measures to reduce carbon dioxide production and enhance carbon sequestration, there is no standard definition, although there are a number of models under consideration. What is being sought is clear ownership and title, a clear understanding of what qualifies as a credit, credit for early action, commodity specifications and the ability to hedge. The author predicts that in the short-tem, industry will experiment with different types of transactions to gain experience and seek partners who are willing to share risk and development cost. In the longer-term, emission reduction credits will be bought and sold as commodities and traded, swapped or exchanged as part of a portfolio in bilateral trade transactions, and used in hedging against future liabilities.

Tendances Carbone no. 74 'The Timing Impact Approach: How particularities of carbon markets influence market developments'

International Nuclear Information System (INIS)

Ruf, Philipp

2012-01-01

Among the publications of CDC Climat Research, 'Tendances Carbone' bulletin specifically studies the developments of the European market for CO 2 allowances. This issue addresses the following points: With the current 'back-loading' proposal of the European Commission on the table it is essential to further examine the specialities of carbon markets to assess the implications of the proposal on the market development of the EU ETS. An emission right is a new kind of good which can be thought of as a hybrid of a commodity good and a financial product

Optimal Bidding and Operation of a Power Plant with Solvent-Based Carbon Capture under a CO2 Allowance Market: A Solution with a Reinforcement Learning-Based Sarsa Temporal-Difference Algorithm

Directory of Open Access Journals (Sweden)

Ziang Li

2017-04-01

Full Text Available In this paper, a reinforcement learning (RL-based Sarsa temporal-difference (TD algorithm is applied to search for a unified bidding and operation strategy for a coal-fired power plant with monoethanolamine (MEA-based post-combustion carbon capture under different carbon dioxide (CO2 allowance market conditions. The objective of the decision maker for the power plant is to maximize the discounted cumulative profit during the power plant lifetime. Two constraints are considered for the objective formulation. Firstly, the tradeoff between the energy-intensive carbon capture and the electricity generation should be made under presumed fixed fuel consumption. Secondly, the CO2 allowances purchased from the CO2 allowance market should be approximately equal to the quantity of CO2 emission from power generation. Three case studies are demonstrated thereafter. In the first case, we show the convergence of the Sarsa TD algorithm and find a deterministic optimal bidding and operation strategy. In the second case, compared with the independently designed operation and bidding strategies discussed in most of the relevant literature, the Sarsa TD-based unified bidding and operation strategy with time-varying flexible market-oriented CO2 capture levels is demonstrated to help the power plant decision maker gain a higher discounted cumulative profit. In the third case, a competitor operating another power plant identical to the preceding plant is considered under the same CO2 allowance market. The competitor also has carbon capture facilities but applies a different strategy to earn profits. The discounted cumulative profits of the two power plants are then compared, thus exhibiting the competitiveness of the power plant that is using the unified bidding and operation strategy explored by the Sarsa TD algorithm.

A Ten-Year Rule to guide the allocation of EU emission allowances

International Nuclear Information System (INIS)

Ahman, Markus; Burtraw, Dallas; Kruger, Joseph; Zetterberg, Lars

2007-01-01

Member States in the European Union (EU) are responsible for National Allocation Plans governing the initial distribution of emission allowances in the CO 2 Emission Trading System, including rules governing allocations to installations that close and to new entrants. The European Commission has provided guidelines to discourage the use of allocation methodologies that provide incentives affecting firms' compliance behavior, for example by rewarding one type of compliance investment over another. We find that the treatment of closures and new entrants by Member States is inconsistent with the general guidelines provided by the EU. We propose stronger EU guidance regarding closures and new entrants, a more precise compensation criterion on which to justify free allocations, and a Ten-Year Rule as a component of future EU policy that can guide a transition from current practice to an approach that places greater weight on efficiency

Cross-Correlations between Energy and Emissions Markets: New Evidence from Fractal and Multifractal Analysis

Directory of Open Access Journals (Sweden)

Gang-Jin Wang

2014-01-01

Full Text Available We supply a new perspective to describe and understand the behavior of cross-correlations between energy and emissions markets. Namely, we investigate cross-correlations between oil and gas (Oil-Gas, oil and CO2 (Oil-CO2, and gas and CO2 (Gas-CO2 based on fractal and multifractal analysis. We focus our study on returns of the oil, gas, and CO2 during the period of April 22, 2005–April 30, 2013. In the empirical analysis, by using the detrended cross-correlation analysis (DCCA method, we find that cross-correlations for Oil-Gas, Oil-CO2, and Gas-CO2 obey a power-law and are weakly persistent. Then, we adopt the method of DCCA cross-correlation coefficient to quantify cross-correlations between energy and emissions markets. The results show that their cross-correlations are diverse at different time scales. Next, based on the multifractal DCCA method, we find that cross-correlated markets have the nonlinear and multifractal nature and that the multifractality strength for three cross-correlated markets is arranged in the order of Gas-CO2 > Oil-Gas > Oil-CO2. Finally, by employing the rolling windows method, which can be used to investigate time-varying cross-correlation scaling exponents, we analyze short-term and long-term market dynamics and find that the recent global financial crisis has a notable influence on short-term and long-term market dynamics.

Emissions trading in the context of electricity deregulation : a case study on Ontario

International Nuclear Information System (INIS)

Johns, G.

2003-01-01

This presentation discussed the deregulation of the electric power industry in Ontario and Alberta with particular reference to emissions trading, emissions profiles for the two provinces, and current market rules. It was noted that deregulation in Ontario is the major impetus for developing an emission trading system. Alberta is also in the process of developing an emission trading system for all industry sectors. The author discussed Ontario's Bill 210 which places a 6 year cap on prices and which offers tax incentives for renewable energy sources. It was argued that Bill 210 negates new generation and inhibits participants and competition in emissions trading market. Ontario generators face competitiveness concerns with neighbouring jurisdictions. Current market rules were outlined for emission caps, allocation for nitrogen oxide and sulfur dioxide allowances, credit creation, emission trading, and credit use. 6 figs

Market power in cap-and-trade auctions: A Monte Carlo approach

International Nuclear Information System (INIS)

Dormady, Noah C.

2013-01-01

Recent greenhouse gas auctions have resulted in base level prices while remaining significantly concentrated. How do dominant firms receive such a large share of emissions allowances without bidding up the market price? This paper provides a Monte Carlo simulation analysis based on a contemporary regional greenhouse gas market in the United States. It introduces a C# simulation software environment, Oligopsony 1.0 that simulates uniform-price emissions auctions in repeated iterations. The results of these simulations indicate that there can be significant non-linearities between profit and market power as exercised through strategic demand reduction. This analysis finds the optimum point of strategic demand reduction that enables firms to exploit these non-linearities. The use of auctions to distribute tradeable pollution rights to firms in heavily concentrated markets can have significant unintended consequences, as it can exacerbate the problems of market power that exist within those markets. -- Highlights: •The theory of market power behavior in emissions auctions is furthered. •Monte Carlo simulation environment Oligopsony 1.0 is introduced. •Simulations provide analysis of optimum bids to exercise market power. •Significant non-linearities exist between profit and the exercise of market power

The CO_2 emission permits market simulation using Continuous Double Auction

International Nuclear Information System (INIS)

Bartoszczuk, Pawel; Stanczak, Jaroslaw

2016-01-01

In this paper we consider the buying and selling prices of carbon dioxide (CO_2) emission permits in trading models with uncertainty. Permission prices, although usually omitted from standard models, may significantly influence the trading market. We thus construct a more realistic trade model. To do this, we introduced several important changes to the standard model, mainly we added The Continuous Double Action.

Emission trading and international competition: The impact of labor market rigidity on technology adoption and output

International Nuclear Information System (INIS)

Caparrós, Alejandro; Péreau, Jean-Christophe; Tazdaït, Tarik

2013-01-01

Emission trading systems have been proposed in different regions to reduce polluting emissions and are in use in the European Union for carbon dioxide emissions. One of the objectives of these systems is to encourage firms to adopt advanced abatement technologies. However, permits also create an incentive to reduce output, which may be seen as negative by policy makers. We analyze the impact of a rigid labour market on these two outcomes, showing the conditions necessary to avoid reductions in production while keeping the incentives to improve abatement technologies. The analysis is done for oligopolistic firms engaged in international rivalry. - Highlights: ► Emission trading reduces production and improves abatement technologies. ► Policy makers see the first outcome as negative and the second as positive. ► This paper studies the impact of market rigidity on these two outcomes. ► It shows conditions to avoid the first outcome and maintain or enhance the second

Planning uncertainties, market risks and new environmental choices: Winning least cost planning combinations

International Nuclear Information System (INIS)

Violette, D.; Lang, C.

1990-01-01

Utility demand and supply-side planners will face new challenges from environmental regulations. Under current proposals, every ton of pollutant will have a cost to utilities, not just the tons that put them over the allowable limit. Planners will have to account for these new costs. To do this, planners need to start tracking emissions implementation actions today, and begin strategies for future regulatory changes. Current legislative proposals include a tax on the carbon content of fuels to curb emissions of greenhouse gases and substantial reductions in sulfur dioxide and nitrogen oxide emissions. The important issue for planners is the flexible compliance requirements within these regulatory changes. The acid rain proposals, for example, include a market-based emissions trading system for emissions allowances. Whenever there is a competitive market, there are market risks, and potential winners and losers. Utilities need to be prepared to analyze and mitigate these risks. Integrated least cost planing is one way a utility will have to meet this challenge. Planning involves uncertainty and risk. The wide array of compliance choices create countless combinations of strategies for utilities to comply with the new emissions regulations. This paper discusses new compliance strategies, demand-side management (DSM) as a compliance strategy, solutions to DSM traps, and the compliance strategy game

Cap-and-Trade Modeling and Analysis: Congested Electricity Market Equilibrium

Science.gov (United States)

Limpaitoon, Tanachai

This dissertation presents an equilibrium framework for analyzing the impact of cap-and-trade regulation on transmission-constrained electricity market. The cap-and-trade regulation of greenhouse gas emissions has gained momentum in the past decade. The impact of the regulation and its efficacy in the electric power industry depend on interactions of demand elasticity, transmission network, market structure, and strategic behavior of firms. I develop an equilibrium model of an oligopoly electricity market in conjunction with a market for tradable emissions permits to study the implications of such interactions. My goal is to identify inefficiencies that may arise from policy design elements and to avoid any unintended adverse consequences on the electric power sector. I demonstrate this modeling framework with three case studies examining the impact of carbon cap-and-trade regulation. In the first case study, I study equilibrium results under various scenarios of resource ownership and emission targets using a 24-bus IEEE electric transmission system. The second and third case studies apply the equilibrium model to a realistic electricity market, Western Electricity Coordinating Council (WECC) 225-bus system with a detailed representation of the California market. In the first and second case studies, I examine oligopoly in electricity with perfect competition in the permit market. I find that under a stringent emission cap and a high degree of concentration of non-polluting firms, the electricity market is subject to potential abuses of market power. Also, market power can occur in the procurement of non-polluting energy through the permit market when non-polluting resources are geographically concentrated in a transmission-constrained market. In the third case study, I relax the competitive market structure assumption of the permit market by allowing oligopolistic competition in the market through a conjectural variation approach. A short-term equilibrium

Life cycle energy and greenhouse gas emissions from transportation of Canadian oil sands to future markets

International Nuclear Information System (INIS)

Tarnoczi, Tyler

2013-01-01

Oil sands transportation diversification is important for preventing discounted crude pricing. Current life cycle assessment (LCA) models that assess greenhouse gas (GHG) emissions from crude oil transportation are linearly-scale and fail to account for project specific details. This research sets out to develop a detailed LCA model to compare the energy inputs and GHG emissions of pipeline and rail transportation for oil sands products. The model is applied to several proposed oils sands transportation routes that may serve as future markets. Comparison between transportation projects suggest that energy inputs and GHG emissions show a high degree of variation. For both rail and pipeline transportation, the distance over which the product is transported has a large impact on total emissions. The regional electricity grid and pump efficiency have the largest impact on pipeline emissions, while train engine efficiency and bitumen blending ratios have the largest impact on rail transportation emissions. LCA-based GHG regulations should refine models to account for the range of product pathways and focus efforts on cost-effective emission reductions. As the climate-change impacts of new oil sands transportation projects are considered, GHG emission boundaries should be defined according to operation control. -- Highlights: •A life cycle model is developed to compare transportation of oil sands products. •The model is applied to several potential future oil sands markets. •Energy inputs and GHG emissions are compared. •Model inputs are explored using sensitivity analysis. •Policy recommendations are provided

A public firm on a market for tradable emission permits. A case study for the Netherlands

International Nuclear Information System (INIS)

Koster, J.M.M.

2001-01-01

In chapters 2 and 3 a survey is given of the literature concerning imperfections in a market for tradable emission permits. Chapter 2 concentrates on profit maximizing firms functioning on unregulated output markets, while Chapter 3 focuses entirely on the inefficiencies arising from participation in the tradable permit scheme of firms that do not minimize their costs. From the survey of the literature in chapters 2 and 3, it appears that researchers have neglected environmental decision making in public firms of the type that have dominated the utility sectors in Europe during the twentieth century. Although their numbers have been reduced by the deregulation and privatization wave in the past two decades, the public firm has certainly not disappeared from the stage in Europe. In chapter 6 we shall fill this gap in the literature and develop a model of decision making in the public firm that can be applied to its decision on pollution abatement, in particular in case a scheme of tradable emission permits is the instrument of environmental policy. Electricity is one of the traditional utility sectors where the public firm was the dominant form of organization. In order to test the applicability of our public firm model we will use it to simulate the decisions of the Dutch electricity production sector in chapters 8 and 9. The chapters 4 and 5 prepare the ground by presenting the relevant facts about the economic regulation of the electricity sector and the relevant environmental policy. Chapter 4 gives a survey of the organization of production and distribution of electricity in the Netherlands during the period 1989-2001. Chapter 5 gives a sketch of air pollution control policy in the Netherlands in so far as it is relevant for the Dutch electricity sector and for the Dutch chemical industry. In chapter 6 we combine the knowledge of the previous chapters and present a model of a public firm which maximizes its utility from output, emission reduction and

An analysis of SO2 emission compliance under the 1990 Clean Air Act Amendments

International Nuclear Information System (INIS)

Hanson, D.A.; Cilek, C.M.; Pandola, G.; Taxon, T.

1992-01-01

The effectiveness of SO 2 emission allowance trading under Title 4 of the 1990 Amendments to the Clean Air Act (CAA) is of great interest due to the innovative nature of this market incentive approach. However, it may be a mistake to frame the compliance problem for a utility as a decision to trade or not. Trading of allowances should be the consequence, not the decision. The two meaningful decision variables for a utility are the control approaches chosen for its units and the amount of allowances to hold in its portfolio of assets for the future. The number allowances to be bought or sold (i.e. traded) is determined by the emission reduction and banking decisions. Our preferred approach is to think of the problem in terms of ABC's of the 1990 CAA Amendments: abatement strategy, banking, and cost competitiveness. The implications of the general principles presented in this paper on least cost emission reductions and emissions banking to hedge against risk are being simulated with version 2 of the ARGUS model representing the electric utility sector and regional coal supplies and transportation rates. A rational expectations forecast for allowances prices is being computed. The computed allowance price path has the property that demand for allowances by electric utilities for current use or for banking must equal the supply of allowances issued by the federal government or provided as forward market contracts in private market transactions involving non-utility speculators. From this rational expectations equilibrium forecast, uncertainties are being explored using sensitivity tests. Some of the key issues are the amount of scrubbing and when it is economical to install it, the amount of coal switching and how much low sulfur coal premiums will be bid up; and the amount of emission trading within utilities and among different utilities

Emissions trading and compliance: Regulatory incentives and barriers

International Nuclear Information System (INIS)

South, D.W.; Bailey, K.A.; McDermott, K.A.

1992-01-01

The Title IV of the Clean Air Act Amendments of 1990 (P.L. 101-549) authorizes the use of transferable emission allowances to achieve reductions in the power generating industry's SO 2 emissions at a minimum possible cost. All electricity generators (greater than 25 MW) are required to hold emissions allowances equal to the amount (tons) of SO 2 emitted during a given year, and meet NO x reduction levels indicated by the Revised New Source Performance Standards (NSPS). This paper will examine the multifaceted goals and problems of states and utilities relative to compliance with Title IV, and in particular as they pertain to the development and functioning of the allowance market together with utility pollution control and power generation technology choice. Section 2 presents possible utility compliance strategies along with possible barriers that utilities may confront regarding the development of a SO 2 allowance market. Section 3 discusses current regulatory barriers and requirements being implemented by state public utility commissions, and Section 4 offers some policy recommendations to achieve the goals of Title IV. Finally, Section 5 presents a summary and conclusions; Appendix A provides programs/mandates developed to data by high sulfur coal states in response to Title IV compliance requirements

Testing the assumptions behind emissions trading in non-market goods: the RECLAIM program in Southern California

International Nuclear Information System (INIS)

Lejano, Raul P.; Hirose, Rei

2005-01-01

Emissions trading is, essentially, a policy instrument that is designed to simulate a market for an otherwise public good. Conceptually, its justification hinges on a number of key assumptions, namely the negligibility of local impacts, the ability to separate and commodify the good in question, and characteristics of a well-functioning market. The authors examine the performance of RECLAIM, a NO x emissions trading program in Southern California, USA, and illustrate how to test these assumptions. There is some evidence that the trading of NO x generates new externalities, such as the possibility that other air pollutants, e.g. volatile organics, are essentially traded along with it. Moreover, the RECLAIM program has recently begun to experience difficulties due to the fact that the market is relatively thin. This analysis provides ways to assess more deeply and reform these trading regimes, including opening up RECLAIM to public review. The case study speaks to a wider arena, as emissions trading is presently being considered in other parts of the world to address issues ranging from acid rain to non-point source pollution to greenhouse gases. The analytic approach, illustrated herein, is a general one that has a wider applicability than the particular case of NO x trading. It is hoped that this kind of critical inquiry can lead to a more careful deliberation of the merits and challenges of emissions trading

Electricity trade and GHG emissions: Assessment of Quebec's hydropower in the Northeastern American market (2006-2008)

International Nuclear Information System (INIS)

Ben Amor, Mourad; Pineau, Pierre-Olivier; Gaudreault, Caroline; Samson, Rejean

2011-01-01

Worldwide electricity sector reforms open up electricity markets and increase trades. This has environmental consequences as exports and imports either increase or decrease local production and consequently greenhouse gas (GHG) emissions. This paper's objective is to illustrate the importance of electricity trade's impact on GHG emissions by providing an estimate of the net GHG emissions resulting from these trades. To achieve this objective, Quebec hourly electricity exchanges with adjacent jurisdictions were examined over the 2006-2008 period. In order to associate a specific GHG emission quantity to electricity trades, hourly marginal electricity production technologies were identified and validated using the Ontario hourly output per power plant and information released in the Quebec adjacent system operator reports. It is estimated that over three years, imports into Quebec were responsible for 7.7 Mt of GHG, while Quebec hydropower exports avoided 28.3 Mt of GHG emissions. Hence, the net result is 20.6 Mt of avoided emissions over 2006-2008, or about 7 Mt per year, which corresponds to more than 8% of the Quebec yearly GHG emissions. When GHG emissions from all life cycle stages (resource extraction to end-of-life) are accounted for, the net avoided GHG emissions increase by 35%, to 27.9 Mt. - Research highlights: → Environmental benefits of hydropower exports are considerable. → Detailed GHG assessment of such electricity trade is missing from the literature. → Net GHG emissions estimate resulting from such trade is provided. → GHG gains are significant in the Northeast American electricity market due to such electricity trade.

Bringing the market inside.

Science.gov (United States)

Malone, Thomas W

2004-04-01

During the dot-com boom, many people saw the potential for new communication technologies to enable radically new business models, but they were far too optimistic about the speed with which the revolution would occur. Now, as the bitter disillusionment of the dot-com bust begins to fade, we have a chance to think again--this time more rationally--about how best to take advantage of the remarkable changes these new technologies are gradually making possible. One such change is the ability to create markets inside companies, allowing decision making to be decentralized and introducing some of the efficiency, flexibility, and motivating influence of free markets. In this article, the author examines this nascent form of business organization, exploring the benefits as well as the potential risks. BP, for example, met its goal of reducing the company's greenhouse gas emissions nine years ahead of schedule, not by setting and enforcing targets for each division but by allowing business unit heads to buy and sell emissions permits among themselves using an electronic trading system. And Hewlett-Packard recently experimented with a system that allowed employees to buy and sell predictions about likely printer sales, using a kind of futures contract. The markets ended up predicting the actual printer sales with much more accuracy than official HP forecasts. At a fundamental level, these changes are enabled by the fact that electronic technologies allow information to be widely shared at little cost. This simple fact has a profound implication for organizing businesses. When more people have more information, they can use it to make their own well-informed decisions, appropriate to local circumstances, instead of following orders from above. As a result, even very large companies can benefit from the collective wisdom of their employees.

Practical guidebook about the market of CO2 emission quotas

International Nuclear Information System (INIS)

2005-01-01

Since January 1, 2005, the European directive about the trading of CO 2 emission quotas foresees the allocation of CO 2 emission quotas to the industrial sectors that generate huge amounts of greenhouse gases (energy generation, cement, glass, steel-making, mineral and paper industries). A system of trading of CO 2 quotas has been implemented and allows the companies to exchange, sale or purchase quotas in order to be conformable with the volume of CO 2 they have been authorized to release in the atmosphere. This guidebook is a vade mecum of the management of emission quotas. It explains the actions of the international community in favor of the fight against greenhouse emissions, the 3 flexibility mechanisms, the French environmental policy, the European system of fight against climatic change, the CO 2 quotas system and its practical implementation. (J.S.)

The political economy of emissions trading; L'economie politique des marches de permis d'emissions negociables

Energy Technology Data Exchange (ETDEWEB)

Hanoteau, J

2004-06-15

This thesis is a positive analysis of emissions trading systems' implementation. We explain why allowances are generally granted for free even though normative economic analysis recommends their sale. We show empirically that free tradable permits, source of windfall profit, motivate rent seeking behaviours. The study focuses on the US market for SO{sub 2} emissions allowances. The initial allocation rule resulted from parliamentary discussions that looked like a zero sum game. We formalize it as an endogenous sharing rule, function of lobbying effort, and we test it using political (money) contributions.We analyse theoretically the behaviour of an influenced regulator that has chosen to organize a market for permits and that must still decide on two policy variables: the whole quantity of permits and the way to allocate them initially. We formalize this decisions making process with the common agency model of politics.We show that the choice of an initial allocation rule is not neutral in presence of political market failures (lobbying). The decision to sell the permits or to grant them for free modifies the shareholders' incentive, in a polluting industry, to pressure for or against the reduction of legal emissions.Then, we analyse the public arbitration between the two policy variables when several industrial lobbies play a partially cooperative game for the free permits. The regulator chooses in priority to grant the rights for free rather than to manipulate their quantity, and this constitutes an efficient answer to the political influence. (author)

Optimization of the allowed levels of radioactive contamination on a virtual market of polluted provisions

International Nuclear Information System (INIS)

Frantsevich, L.Yi.

1997-01-01

The goal is to optimize the allowed levels of 137 Cs contamination of food products according to the ALARA principle. The model creates a virtual market of contaminated daily portions of various products, their contamination being distributed log normally with the same parameters as in real products. The consumer requests portions and wasters contaminated until one obtains 365 acceptable portions of every product per year. The cost of wastering is high at a low allowed level. The floating price of irradiation depends on the yearly consumption of 137 Cs and is stated very high when the last value approaches the dose limit (risk aversive function). Varying allowed levels, it is possible to minimize the cost of wastering and total cost of wastering and irradiation. The iterative algorithm is proposed

After the Hague, Bonn and Marrakech: uncertainties on the future international market of emission permits

International Nuclear Information System (INIS)

Kitous, A.; Criqui, P.; Blanchard, O.

2002-01-01

The purpose of this article is to present an economic assessment, step by step, of the successive developments of the negotiation on weather changes since the Kyoto protocol in 1997 until the agreement achieved in Marrakech during the seventh Conference of the Parties (COP 7) in November 2001. The analysis covers the international market of emission rights, a key mechanism of the Protocol, the purpose of which is to facilitate the Parties' compliance with their undertakings, by introducing flexibility to improve the economic efficiency of emission reduction. However, it now appears that despite the Marrakech agreement in November 2001, the system is weakened by the withdrawal of the USA decided by President G.W. Bush in March 2001, following COP 6 in The Hague, and by a potential excess of permits due to the economic recession of transition countries since the early nineties (hot air). As things stands, the establishment of the market between the countries taking part in the process will undoubtedly require some management of this hot air between transition countries (Eastern Europe and Ex USSR) and the other Parties of appendix B still involved in the process. The uncertainties weighing on the future market of emission permits strengthen the strategic significance of the implementation of effective reduction policies within those regions and particularly within Europe. (authors)

Auction Design for the Allocation of Emission Permits in the Presence of Market Power

International Nuclear Information System (INIS)

Sunnevaag, K.J.

2003-01-01

To the extent that emission permits have been allocated using market mechanisms, this has been done using a sealed-bid auction design, typically with discriminatory prices. However, several authors have recommended the ascending auction format. Basically, two 'competing' ascending auction designs have been suggested, the standard ascending auction (with clock or demand schedules), or an alternative ascending-clock implementation of Vickrey-pricing. The latter design was introduced as a response to problems of bid shading under the sealed-bid and the standard ascending auction format. The purpose of this paper is to investigate the allocation of permits under these two alternative mechanisms. The auction process and the resulting market outcome in the presence of oligopolistic competition are simulated. In this setting, it is not obvious that bid shading is the optimal strategy under the standard design, nor is it obvious that sincere bidding is the optimal strategy under the alternative ascending auction design. The alternative auction format makes it less costly to pursue a strategy to increase market shares through the acquisition of emission permits, thus increasing the competitor's costs, leading to overbidding as the optimal strategy

Impact of CO2 quota allocation to new entrants in the electricity market

Energy Technology Data Exchange (ETDEWEB)

Lindboe, H.H.; Werling, J.; Kofoed-Wiuff, A. [Ea Energy Analyses (Denmark); Bregnbaek, L. [Energy Modelling (Denmark)

2007-08-28

In 2003, the EU adopted a directive on a greenhouse gas emissions trading scheme (ETS) encompassing all major energy-producing units and the majority of the energy-intensive industry. The EU ETS is based on the recognition that creating a price for carbon through the establishment of a market for emission reductions provides the most cost-effective way of complying with international greenhouse gas commitments (EU 2005, EU action against climate change). All countries have opted to allocate CO{sub 2}-allowances to new power plants. The present project explores the consequences of allocation to new entrants on market players' investments in the electric market, the welfare-economic consequences and impacts on long-term CO{sub 2}-emission from the electricity sector. (au)

Implementation of a european directive establishing a negotiable CO2 emissions trading scheme

International Nuclear Information System (INIS)

Coussy, P.

2003-01-01

Approved on July 22, 2003, European Directive 87/2003/EC establishes a scheme for the trading of greenhouse gas emissions allowances. Before the market comes into effect on January 1, 2005, industrialists will have to account for a new financial asset in planning development strategy: the CO 2 allowance. Each Member State is currently developing a climate plan that includes the allocation of CO 2 emissions allowances to industrial installations. It will not be possible to exceed these allowances without incurring a financial penalty. (author)

The political economy of emissions trading

International Nuclear Information System (INIS)

Hanoteau, J.

2004-06-01

This thesis is a positive analysis of emissions trading systems' implementation. We explain why allowances are generally granted for free even though normative economic analysis recommends their sale. We show empirically that free tradable permits, source of windfall profit, motivate rent seeking behaviours. The study focuses on the US market for SO 2 emissions allowances. The initial allocation rule resulted from parliamentary discussions that looked like a zero sum game. We formalize it as an endogenous sharing rule, function of lobbying effort, and we test it using political (money) contributions.We analyse theoretically the behaviour of an influenced regulator that has chosen to organize a market for permits and that must still decide on two policy variables: the whole quantity of permits and the way to allocate them initially. We formalize this decisions making process with the common agency model of politics.We show that the choice of an initial allocation rule is not neutral in presence of political market failures (lobbying). The decision to sell the permits or to grant them for free modifies the shareholders' incentive, in a polluting industry, to pressure for or against the reduction of legal emissions.Then, we analyse the public arbitration between the two policy variables when several industrial lobbies play a partially cooperative game for the free permits. The regulator chooses in priority to grant the rights for free rather than to manipulate their quantity, and this constitutes an efficient answer to the political influence. (author)

Putting a price on carbon. Econometric essays on the European Union emissions trading scheme and its impacts

Energy Technology Data Exchange (ETDEWEB)

Aatola, P.

2013-06-01

This dissertation examines the main instrument of the European Union climate policy, the emissions trading scheme (EU ETS) during its first years. Emission trading provides a cost-efficient way to reduce emissions. It creates a price on carbon dioxide and thereby incentives for cleaner production. The four empirical studies in this dissertation provide new information on the price determination in the emissions trading market, market efficiency and market interactions with the electricity markets. This information is useful for many purposes. It benefits the market participants who make choice between trading of emission allowances in the market and abatement of emissions. For the authorities and policy planners the price signal and the efficiency of the markets reveal unique real-time information on marginal abatement costs, impacts of policy decisions and impacts of institutional design of this policy instrument. To be a well-functioning policy instrument the EU ETS should create a credible price signal and efficient markets for trading allowances. The objective of this dissertation is to analyze the EU ETS markets and the price of the European Union emissions allowance, EUA, with econometric time series models. A large data set on market fundamentals is used to analyze the price series. The results of this dissertation reveal that EU ETS is functions well. Carbon has a price that reflects to a large extent the market fundamentals in the study period. The markets are maturing even if not fully informational efficient yet. Interactions with electricity markets are close. The impact of price of carbon on the price of electricity is positive but spatially uneven. In the long run, also climate change affects the electricity bill. The first study of this dissertation investigates the price determination in the market. The empirical results based on years 2005-2011 show that the price of the EUA is largely determined by the market fundamentals. Especially the price of

Does EU emissions trading bite? An event study

International Nuclear Information System (INIS)

Jong, Thijs; Couwenberg, Oscar; Woerdman, Edwin

2014-01-01

The aim of this paper is to examine whether shareholders consider the EU Emissions Trading Scheme (EU ETS) as value-relevant for the participating firms. An analysis is conducted of the share prices changes as caused by the first publication of compliance data in April, 2006, which disclosed an over-allocation of emission allowances. Through an event study, it is shown that share prices actually increased as a result of the allowance price drop when firms have a lower carbon-intensity of production and larger allowance holdings. There was no significant value impact from firms' allowance trade activity or from the pass-through of carbon-related production costs (carbon leakage). The conclusion is that the EU ETS does ‘bite’. The main impact on the share prices of firms arises from their carbon-intensity of production. The EU ETS is thus valued as a restriction on pollution. - Highlights: • Firms are more positively valued with lower carbon-intensities of production. • Firms are more negatively valued with smaller holdings of allowances. • The stock market does not value the firms' allowance trade activity. • The stock market does not seem to value the pass-through of carbon costs in product prices

Mobil emission reduction credits for natural gas vehicle programs

International Nuclear Information System (INIS)

Baker, G.F.

1993-01-01

Since the passage of the Clean Air Act Amendments in 1990, there has been increasing interest among regulators and business interests alike in innovative, market-based strategies to air quality control. In particular, larger metropolitan areas have begun to examine marketable emission reduction credit (ERC) programs. These programs limit the total allowable emissions in a non-attainment area, allocate these emission open-quotes creditsclose quotes among sources in the region, and allow the sources to redistribute their allowances through trading. This approach provides for the most cost-effective distribution of control burdens among affected sources, taking advantage of the differences in marginal control costs. Some control measures applied to mobile sources may be significantly less expensive than those applied to stationary sources, making mobile sources an excellent candidate for inclusion in an ERC program. However, there are several potential problems involving quantification, enforcement, and credit trading issues that hinder the development of mobile source ERC programs. This paper will evaluate those obstacles and discuss how they are being addressed in a Natural Gas Vehicle (NGV) program currently under development for the Houston ozone non-attainment area. Specifically, the study will outline the credit validation (i.e., quantification) procedure, including baseline emission determination and emission testing for each NGV in the program. In addition, the study will describe the vehicle/fuel consumption tracking system, and discuss issues related to credit trading with stationary sources. Finally, observations are made concerning the applicability of mobile ERC programs for other emission control measures such as old vehicle scrappage and vehicle Inspection and Maintenance programs

17 CFR 240.17i-7 - Calculations of allowable capital and risk allowances or alternative capital assessment.

Science.gov (United States)

2010-04-01

...) Allowance for market risk. The supervised investment bank holding company must compute an allowance for market risk on a consolidated basis for all proprietary positions, including debt instruments, equity instruments, commodity instruments, foreign exchange contracts, and derivative contracts as the aggregate of...

The CO{sub 2} emission permits market simulation using Continuous Double Auction

Energy Technology Data Exchange (ETDEWEB)

Bartoszczuk, Pawel [Warsaw School of Economics (Poland); Stanczak, Jaroslaw

2016-07-01

In this paper we consider the buying and selling prices of carbon dioxide (CO{sub 2}) emission permits in trading models with uncertainty. Permission prices, although usually omitted from standard models, may significantly influence the trading market. We thus construct a more realistic trade model. To do this, we introduced several important changes to the standard model, mainly we added The Continuous Double Action.

Five essays on emissions trading

Energy Technology Data Exchange (ETDEWEB)

Godal, Odd

2005-03-01

The thesis discusses energy, environmental and economic aspects of polluting emissions with emphasis on greenhouse gas trade and political measures. 5 papers are included with titles: 1) Carbon trading across sources and periods constrained by the Marrakesh Accords which examines examine the potential effects on permit prices and abatement costs of four compliance rules governing emissions trade across sources and periods in the Kyoto Protocol: The banking rule that allows excess permits to be used later; the restoration rate rule that penalizes borrowing; the commitment period reserve rule that limits sales; and finally, the suspension rule that restricts borrowing and sales. Our framework is a two-period model where parties may be out of compliance in the Kyoto period, but are assumed to comply at a later time. Under varying assumptions about market power and US participation, we find that the rules may have pronounced effects on individual costs, but overall efficiency is not severely affected. 2) Affine price expectations and equilibrium in strategic markets which considers equilibrium in imperfect markets, featuring agents who exchange property rights. Important cases include trade in emission permits of greenhouse gases, or exchange of catch quotas of fish. Some players act strategically while others are price-takers. The ''demand curve'' is endogenous, and it affects all parties. The resulting, reduced objectives need not be concave. Therefore, existence of equilibrium is a delicate matter. To simplify things, and to ensure availability of ''equilibria up to first order'', we presume that all strategic agents form affine price expectations. 3) Greenhouse gases, quota exchange and oligopolistic competition that discusses the problem how quotas can be shared in the ''emissions market'' and how can the agents reach as overall equilibrium in the product market. 4) Strategic markets in property rights

Five essays on emissions trading

Energy Technology Data Exchange (ETDEWEB)

Godal, Odd

2005-03-01

The thesis discusses energy, environmental and economic aspects of polluting emissions with emphasis on greenhouse gas trade and political measures. 5 papers are included with titles: 1) Carbon trading across sources and periods constrained by the Marrakesh Accords which examines examine the potential effects on permit prices and abatement costs of four compliance rules governing emissions trade across sources and periods in the Kyoto Protocol: The banking rule that allows excess permits to be used later; the restoration rate rule that penalizes borrowing; the commitment period reserve rule that limits sales; and finally, the suspension rule that restricts borrowing and sales. Our framework is a two-period model where parties may be out of compliance in the Kyoto period, but are assumed to comply at a later time. Under varying assumptions about market power and US participation, we find that the rules may have pronounced effects on individual costs, but overall efficiency is not severely affected. 2) Affine price expectations and equilibrium in strategic markets which considers equilibrium in imperfect markets, featuring agents who exchange property rights. Important cases include trade in emission permits of greenhouse gases, or exchange of catch quotas of fish. Some players act strategically while others are price-takers. The ''demand curve'' is endogenous, and it affects all parties. The resulting, reduced objectives need not be concave. Therefore, existence of equilibrium is a delicate matter. To simplify things, and to ensure availability of ''equilibria up to first order'', we presume that all strategic agents form affine price expectations. 3) Greenhouse gases, quota exchange and oligopolistic competition that discusses the problem how quotas can be shared in the ''emissions market'' and how can the agents reach as overall equilibrium in the product market. 4) Strategic markets in property rights without price-takers that deals with Cournot-type models of

The European carbon market (2005-2007): banking, pricing and risk hedging strategies

International Nuclear Information System (INIS)

Chevallier, J.

2008-11-01

This thesis investigates the market rules of the European carbon market (EU ETS) during 2005-2007. We provide theoretical and empirical analyses of banking and borrowing provisions, price drivers and risk hedging strategies attached to tradable quotas, which were introduced to cover the CO 2 emissions of around 10,600 installations in Europe. In Chapter 1, we outline the economic and environmental effects of banking and borrowing on tradable permits markets. More specifically, we examine the banking and borrowing provisions adopted in the EU ETS, and the effects of banning banking between Phases I and II on CO 2 price changes. We show statistically that the low levels of CO 2 prices recorded until the end of Phase I may be explained by the restriction on the inter-period transfer of allowances, besides the main explanations that were identified by market observers. In Chapter 2, we identify the carbon price drivers since the launch of the EU ETS on January 1, 2005. We emphasize the central role played by the 2005 yearly compliance event imposed by the European Commission in revealing the net short/long position at the installation level in terms of allowances allocated with respect to verified emissions. The main result of this study features that price drivers of CO 2 allowances linked to energy market prices and unanticipated weather events vary around institutional events. Moreover, we show the influence of the variation of industrial production in three sectors covered by the EU ETS on CO 2 price changes by applying a disentangling analysis, that has also been extended at the country-level. In Chapter 3, we focus on the risk hedging strategies linked to holding CO 2 allowances. By using a methodology applied on stock markets, we recover the changes in investors' average risk aversion. This study shows that, during the time period considered, risk aversion has been higher on the carbon market than on the stock market, and that the risk is linked to an increasing

The political economy of emissions trading; L'economie politique des marches de permis d'emissions negociables

Energy Technology Data Exchange (ETDEWEB)

Hanoteau, J

2004-06-15

This thesis is a positive analysis of emissions trading systems' implementation. We explain why allowances are generally granted for free even though normative economic analysis recommends their sale. We show empirically that free tradable permits, source of windfall profit, motivate rent seeking behaviours. The study focuses on the US market for SO{sub 2} emissions allowances. The initial allocation rule resulted from parliamentary discussions that looked like a zero sum game. We formalize it as an endogenous sharing rule, function of lobbying effort, and we test it using political (money) contributions.We analyse theoretically the behaviour of an influenced regulator that has chosen to organize a market for permits and that must still decide on two policy variables: the whole quantity of permits and the way to allocate them initially. We formalize this decisions making process with the common agency model of politics.We show that the choice of an initial allocation rule is not neutral in presence of political market failures (lobbying). The decision to sell the permits or to grant them for free modifies the shareholders' incentive, in a polluting industry, to pressure for or against the reduction of legal emissions.Then, we analyse the public arbitration between the two policy variables when several industrial lobbies play a partially cooperative game for the free permits. The regulator chooses in priority to grant the rights for free rather than to manipulate their quantity, and this constitutes an efficient answer to the political influence. (author)

Coal marketability: Effects of deregulation and regulation

International Nuclear Information System (INIS)

Attanasi, E.

2000-01-01

Electrical utility deregulation will force power plants to compete for sales because they will not longer have captive markets. Market uncertainty and uncertainty about future environmental regulations have encouraged power plants to shift to low sulfur coal and/or to use emissions allowances to comply with Phase 2 of the 1990 Clean Air Act Amendments. Mines in Northern and Central Appalachia and the Illinois Basin shipped 240 million tons of non-compliance coal to power plants without scrubbers in 1997. Under Phase 2, this coal will be replaced by low sulfur coal and/or be used with emission permits. It is possible that Powder River Basin coal production will have to increase by over 200 million tons/year to meet new demand. The prices of emissions permits will impose penalties on non-compliance coal that will probably drive out marginal coal producers. For example, if the cost of an emission permit is $200, coal from the Pittsburgh bed could bear a sulfur penalty of $6.55 per ton and similarly, coal from the Herrinbed could bear a penalty of $8.64 per ton

Redefining RECs: Additionality in the voluntary Renewable Energy Certificate market

Science.gov (United States)

Gillenwater, Michael Wayne

In the United States, electricity consumers are told that they can "buy" electricity from renewable energy projects, versus fossil fuel-fired facilities, through participation in a voluntary green power program. The marketing messages communicate to consumers that their participation and premium payments for a green label will cause additional renewable energy generation and thereby allow them to claim they consume electricity that is absent pollution as well as reduce pollutant emissions. Renewable Energy Certificates (RECs) and wind energy are the basis for the majority of the voluntary green power market in the United States. This dissertation addresses the question: Do project developers respond to the voluntary REC market in the United States by altering their decisions to invest in wind turbines? This question is investigated by modeling and probabilistically quantifying the effect of the voluntary REC market on a representative wind power investor in the United States using data from formal expert elicitations of active participants in the industry. It is further explored by comparing the distribution of a sample of wind power projects supplying the voluntary green power market in the United States against an economic viability model that incorporates geographic factors. This dissertation contributes the first quantitative analysis of the effect of the voluntary REC market on project investment. It is found that 1) RECs should be not treated as equivalent to emission offset credits, 2) there is no clearly credible role for voluntary market RECs in emissions trading markets without dramatic restructuring of one or both markets and the environmental commodities they trade, and 3) the use of RECs in entity-level GHG emissions accounting (i.e., "carbon footprinting") leads to double counting of emissions and therefore is not justified. The impotence of the voluntary REC market was, at least in part, due to the small magnitude of the REC price signal and lack of

What You Should Know About Carbon Markets

Directory of Open Access Journals (Sweden)

Maria Mansanet-Bataller

2008-12-01

Full Text Available Since the entry into force of the Kyoto Protocol, carbon trading has been in continuous expansion. In this paper, we review the origins of carbon trading in order to understand how carbon trading works in Europe and, specifically, the functioning of the European Union Emission Trading Scheme (EU ETS and the workings of several spot, futures and options markets where European Union Allowances are traded. As well, the linking of the EU ETS with the other United Nations carbon markets is also studied.

Achieving emissions reduction through oil sands cogeneration in Alberta’s deregulated electricity market

International Nuclear Information System (INIS)

Ouellette, A.; Rowe, A.; Sopinka, A.; Wild, P.

2014-01-01

The province of Alberta faces the challenge of balancing its commitment to reduce CO 2 emissions and the growth of its energy-intensive oil sands industry. Currently, these operations rely on the Alberta electricity system and on-site generation to satisfy their steam and electricity requirements. Most of the on-site generation units produce steam and electricity through the process of cogeneration. It is unclear to what extent new and existing operations will continue to develop cogeneration units or rely on electricity from the Alberta grid to meet their energy requirements in the near future. This study explores the potential for reductions in fuel usage and CO 2 emissions by increasing the penetration of oil sands cogeneration in the provincial generation mixture. EnergyPLAN is used to perform scenario analyses on Alberta’s electricity system in 2030 with a focus on transmission conditions to the oil sands region. The results show that up to 15–24% of CO 2 reductions prescribed by the 2008 Alberta Climate Strategy are possible. Furthermore, the policy implications of these scenarios within a deregulated market are discussed. - Highlights: • High levels of cogeneration in the oil sands significantly reduce the total fuel usage and CO 2 emissions for the province. • Beyond a certain threshold, the emissions reduction intensity per MW of cogeneration installed is reduced. • The cost difference between scenarios is not significant. • Policy which gives an advantage to a particular technology goes against the ideology of a deregulated market. • Alberta will need significant improvements to its transmission system in order for oil sands cogeneration to persist

Effects of US biofuel policies on US and world petroleum product markets with consequences for greenhouse gas emissions

International Nuclear Information System (INIS)

Thompson, Wyatt; Whistance, Jarrett; Meyer, Seth

2011-01-01

US biofuel policy includes greenhouse gas reduction targets. Regulators do not address the potential that biofuel policy can have indirect impacts on greenhouse gases through its impacts on petroleum product markets, and scientific research only partially addresses this question. We use economic models of US biofuel and agricultural markets and US and world petroleum and petroleum product markets to show that discontinuing biofuel tax credits and ethanol tariff lower biofuel use could lead to increased US petroleum product use, and a reduction in petroleum product use in other parts of the world. The net effect is lower greenhouse gas emissions. Under certain assumptions, we show that biofuel use mandate elimination can have positive or negative impacts on greenhouse gas emissions. The magnitude and the direction of effects depend on how US biofuel trade affects biofuel in other countries with different emissions, context that determines how important use mandates are in the first place, who pays mandate costs, and the price responsiveness of global petroleum supplies and uses. However, our results show that counter-intuitive effects are possible and discourage broad conclusions about the greenhouse gas impacts of removing these elements of US biofuel policy. - Highlights: → Biofuel policy has counter-intuitive greenhouse gas effects under certain conditions. → US biofuel policies affect global petroleum markets, with implications for GHGs. → US biofuel use mandate GHG effects depend on whether they are binding and who pays. → US biofuel GHGs are sensitive to policy, petroleum market responses, and biofuel trade.

A Comparison of Emission Taxes and Permit Markets for Controlling Correlated Externalities

Energy Technology Data Exchange (ETDEWEB)

Caplan, A.J. [Department of Economics, Utah State University, 3530 Old Main Hill, Logan, UT 84322-3530 (United States)

2006-08-15

This paper provides an answer to the question: Are emission taxes an efficient and self-enforcing mechanism to control correlated externality problems? By 'correlated externalities' we mean multiple pollutants that are jointly produced by a single source but cause differentiated regional and global externalities. By 'self-enforcing' we mean a mechanism that accounts for the endogeneity that exists between competing jurisdictions in the setting of environmental policy within a federation of regions. This mechanism incorporates sequential decision making among the jurisdictions and therefore determines an equilibrium based on the concept of subgame perfection. We find that, unlike joint domestic and international tradable permit markets, joint emission taxes and a hybrid scheme of permits and taxes are neither efficient nor self-enforcing.

A Comparison of Emission Taxes and Permit Markets for Controlling Correlated Externalities

International Nuclear Information System (INIS)

Caplan, A.J.

2006-01-01

This paper provides an answer to the question: Are emission taxes an efficient and self-enforcing mechanism to control correlated externality problems? By 'correlated externalities' we mean multiple pollutants that are jointly produced by a single source but cause differentiated regional and global externalities. By 'self-enforcing' we mean a mechanism that accounts for the endogeneity that exists between competing jurisdictions in the setting of environmental policy within a federation of regions. This mechanism incorporates sequential decision making among the jurisdictions and therefore determines an equilibrium based on the concept of subgame perfection. We find that, unlike joint domestic and international tradable permit markets, joint emission taxes and a hybrid scheme of permits and taxes are neither efficient nor self-enforcing

Analysis of CO2 emissions and of the other characteristics of the European market of new passenger cars. 3. Brands analysis

International Nuclear Information System (INIS)

Zervas, Efthimios

2010-01-01

This article analyses the engine and vehicle characteristics and CO 2 emissions of the new passenger cars for the thirteen major brands of the European market. As in the first two articles of this work, the target is to find the real market parameters influencing exhaust CO 2 emissions. This analysis is focused on the sales distribution of the major brands, EU average and within each country, and four main parameters of each brand having an impact on CO 2 emissions: average vehicle weight, average engine capacity, average maximum and specific power. The average CO 2 emissions of each brand on the new European driving cycle and its urban and extra urban parts are examined at the last part of this article.

Market Power with Interdependent Demand. Sale of Emission Permits and Natural Gas from Russia

International Nuclear Information System (INIS)

Hagem, C.; Kallbekken, S.; Westskog, H.; Maestad, O.

2006-01-01

With implementation of the Kyoto Protocol, Russia will most likely be able to exert market power in the emission permit market. But, as Russia is also a big exporter of fossil fuels, the incentives to boost the permit price may be weak. However, a significant share of Russia's fossil fuel exports is natural gas. If a high permit price boosts the demand for natural gas through substitution from more polluting fuels and thus increase gas profits, this may increase the incentives to exert monopoly power in the permit market. Moreover, a large fossil fuel exporter may use its market position to influence the effective demand for permits. Hence, the relationship between permit income and fossil fuels exports runs in both directions. In this article, we explore the interdependence between the revenues from permit and fossil fuel exports both theoretically and numerically. A computable general equilibrium model suggests the fact that Russia as a big gas exporter has small effect on the incentives to exert monopoly power in the permit market. Moreover, Russia's monopoly power in the permit market has a small, but non-negligible impact on the optimal level of Russian gas exports. (author)

Interactions of a tradable green certificate market with a tradable permits market

DEFF Research Database (Denmark)

Morthorst, Poul Erik

2001-01-01

certificate market to promote the development of renewables. If these two instruments are brought into play at the same time, two separate markets with two individual targets will co-exist in a number of countries. With a focus on the green certificate market, this paper discusses how these two markets may...... to achieve this emission reduction. More policy instruments are on hand to pursue this objective. Frequently discussed currently is the establishing of a market for tradable permits for CO2-emissions to achieve emission reductions in the power industry. In parallel with this is the introduction of a green...... interact with each other in international trade. Three different cases are analysed: (1) A green certificate market without any tradable permits scheme, (2) a green certificate market in combination with a tradable permits scheme, based on grandfathering and, finally, (3) a green certificate market...

Short-Term Power Plant GHG Emissions Forecasting Model

International Nuclear Information System (INIS)

Vidovic, D.

2016-01-01

In 2010, the share of greenhouse gas (GHG) emissions from power generation in the total emissions at the global level was about 25 percent. From January 1st, 2013 Croatian facilities have been involved in the European Union Emissions Trading System (EU ETS). The share of the ETS sector in total GHG emissions in Croatia in 2012 was about 30 percent, where power plants and heat generation facilities contributed to almost 50 percent. Since 2013 power plants are obliged to purchase all emission allowances. The paper describes the short-term climate forecasting model of greenhouse gas emissions from power plants while covering the daily load diagram of the system. Forecasting is done on an hourly domain typically for one day, it is possible and more days ahead. Forecasting GHG emissions in this way would enable power plant operators to purchase additional or sell surplus allowances on the market at the time. Example that describes the operation of the above mentioned forecasting model is given at the end of the paper.(author).

Russia at GHG Market

International Nuclear Information System (INIS)

Golub, A.; Strukova, E.

2004-01-01

In the first Kyoto commitment period Russia could be the major supplier for the greenhouse gases (GHG) emissions market. Potential Russian supply depends on the ability of Russia to keep GHG emissions lower than the Kyoto target. In the literature there is no common understanding of the total trading potential of Russia at the international carbon market. In this paper we focus on CO2 emission, which constituted nearly 80% of Russian GHG emission. We compare different projections of Russian CO2 emission and analyze the most important factors, which predetermine the CO2 emission growth. In a transition economy these factors are: Gross Domestic Product (GDP) dynamic, changes of GDP structure, innovation activity, transformation of export-import flows and response to the market signals. The input-output macroeconomic model with the two different input-output tables representing old and new production technologies has been applied for the analysis to simulate technological innovations and structural changes in the Russian economy during transition period. The Russian supply at the international GHG market without forest sector may be up to 3 billion metric ton of CO2 equivalent. Earlier actions to reduce CO2 emission are critical to insure the Russian supply at the international carbon market. With regard to the current status of the Russian capital market, the forward trading with OECD countries is only the possibility to raise initial investments to roll no-regret and low-cost GHG reduction. This paper discusses uncertainties of Russian CO2 emission dynamics and analyzes the different incentives to lower the emission pathway

A competitive carbon emissions scheme with hybrid fiscal incentives: The evidence from a taxi industry

International Nuclear Information System (INIS)

Liu, Yang; Han, Liyan; Yin, Ziqiao; Luo, Kongyi

2017-01-01

As two major approaches to reduce carbon emissions, command-and-control instruments and market-based carbon trading systems have their own weaknesses. Our paper first proposes a type of endogenous equilibrium methodology to dynamically derive the industrial carbon emissions standards. At the equilibrium, the sum of all carbon assets and liabilities is zero in the considered industry. Moreover, the standards fall over time with low-carbon technological advance. Most importantly, combining Pigou's and Coase's ideas, we construct a fiscal instrument accounting for both carbon taxes and allowances based on the dynamically improved emissions standards and carbon trading prices. This “No revenue for government” method implements a self-operated ecology for carbon trading market. Finally, considering the “Waterloo” recession of carbon prices, we introduce an adjustment factor into the model, which generates a negative-feedback mechanism with carbon prices. To support our idea, we present the application to Beijing taxi industry in detail and raise relative policy implications based on the evidence. - Highlights: • Dynamic endogenous equilibrium standards for carbon emissions. • A public policy oriented market mechanism combining command-and-control instruments and carbon trading. • Hybrid incentives to emission reduction combining carbon taxes and allowances. • The adjustment coefficient generating a negative feedback mechanism with carbon prices.

Benchmarking of refinery CO2 emissions. The CWT methodology provides a way forward

Energy Technology Data Exchange (ETDEWEB)

Larive, J.F. [CONCAWE, Brussels (Belgium)

2009-10-01

The EU Greenhouse Gas Emissions Trading Scheme foresees a number of mechanisms for distributing emission allowances amongst market players. For those economic sectors exposed to international competition, a portion of the required allowances will be distributed free of charge. In order to do this in an equitable manner, the amount of free allowances will be based on a sectoral benchmark representing best practice in the sector. In cooperation with Solomon Associates, CONCAWE has developed the so-called Complexity Weighted Tonne (CWT) methodology which provides a common and balanced basis for comparing the performance of refineries.

Analysis of the CO2 emissions and of the other characteristics of the European market of new passenger cars. 2. Segment analysis

International Nuclear Information System (INIS)

Zervas, Efthimios

2010-01-01

This article analyzes the engine and vehicle characteristics and the CO 2 emissions of the new passenger cars for all segments of the European market. As in the first article of this work, the target is to find the real market parameters influencing exhaust CO 2 emissions. The present analysis is focused on the segment sales distribution (EU average and within each country) and also in four parameters of each segment influencing CO 2 emissions: average vehicle weight, average engine capacity, average maximum and specific power. The second part of this work concerns the CO 2 emissions of each segment on the New European Driving Cycle and its urban and extra urban parts.

Well-to-Wheels Greenhouse Gas Emissions Analysis of High-Octane Fuels with Various Market Shares and Ethanol Blending Levels

Energy Technology Data Exchange (ETDEWEB)

Han, Jeongwoo [Argonne National Lab. (ANL), Argonne, IL (United States); Elgowainy, Amgad [Argonne National Lab. (ANL), Argonne, IL (United States); Wang, Michael [Argonne National Lab. (ANL), Argonne, IL (United States); Divita, Vincent [Argonne National Lab. (ANL), Argonne, IL (United States)

2015-07-14

In this study, we evaluated the impacts of producing HOF with a RON of 100, using a range of ethanol blending levels (E10, E25, and E40), vehicle efficiency gains, and HOF market penetration scenarios (3.4% to 70%), on WTW petroleum use and GHG emissions. In particular, we conducted LP modeling of petroleum refineries to examine the impacts of different HOF production scenarios on petroleum refining energy use and GHG emissions. We compared two cases of HOF vehicle fuel economy gains of 5% and 10% in terms of MPGGE to baseline regular gasoline vehicles. We incorporated three key factors in GREET — (1) refining energy intensities of gasoline components for the various ethanol blending options and market shares, (2) vehicle efficiency gains, and (3) upstream energy use and emissions associated with the production of different crude types and ethanol — to compare the WTW GHG emissions of various HOF/vehicle scenarios with the business-as-usual baseline regular gasoline (87 AKI E10) pathway.

Implementation of the European directive for the market of negotiable CO2 emission permits

International Nuclear Information System (INIS)

Coussy, P.

2004-01-01

The European directive 87/2003/CE, establishing a system of exchange of greenhouse gas emission quotas, was adopted on July 22, 2003. Before the opening of the gas market on July 1, 2005, the industrialists will have to integrate in their strategic development plan the existence of a new financial asset: the CO 2 quota. At a time when all member states are preparing their 'climate plan', a given number of CO 2 emission quotas will be assigned to industrialists. They will have to stay below these quotas otherwise financial sanctions will be imposed. (J.S.)

Development of a marketing strategy for the Coal Research Establishment`s emissions monitoring database

Energy Technology Data Exchange (ETDEWEB)

Beer, A.D.; Hughes, I.S.C. [British Coal Corporation, Stoke Orchard (United Kingdom). Coal Research Establishment

1995-06-01

A summary is presented of the results of work conducted by the UK`s Coal Research Establishment (CRE) between April 1994 and December 1994 following the completion of a project on the utilisation and publication of an emissions monitoring database. The database contains emissions data for most UK combustion plant, gathered over the past 10 years. The aim of this further work was to identify the strengths and weaknesses of CRE`s database, to investigate potential additional sources of data, and to develop a strategy for marketing the information contained within the database to interested parties. 3 figs.

Emission trading in Ontario : Understanding and managing compliance risk

Energy Technology Data Exchange (ETDEWEB)

White, A. [Mirant Canada Energy Marketing ltd., Toronto, ON (Canada)

2002-07-01

Mirant is one of the top five American energy marketer of power and gas, with more than 20,700 megawatts (MW) of electric generating capacity worldwide, of which 13,600 is in North America. The author presented a chart displaying nitrogen oxide emissions in Ontario, followed by another chart with the emissions of sulphur dioxide also in Ontario. The emission targets for the power sector were reviewed, as were the nitrogen oxide emission limits from 2002 to 2010. The major features of the Ontario legislation were discussed, covering allowance allocation, unlimited banking and limited provisions for credit. Ontario fossil capacity was reviewed, followed by emission allowance allocation. The issues and risks for Independent Power Producers were discussed. They included the emission rate compared to that of the competition, how much the facility was run last year and how much you expect to run it next year, the possibility of buying allowances or credits and at what cost. Looking to the future, the government of Ontario has announced bold actions on industry emissions. The initiatives include consultations, emission limits for both nitrogen oxide and sulphur dioxide from all major industrial emitters, and tighter province-wide targets and timelines for nitrogen oxide and sulphur dioxide. refs., tabs., figs.

Emission trading in Ontario : Understanding and managing compliance risk

International Nuclear Information System (INIS)

White, A.

2002-01-01

Mirant is one of the top five American energy marketer of power and gas, with more than 20,700 megawatts (MW) of electric generating capacity worldwide, of which 13,600 is in North America. The author presented a chart displaying nitrogen oxide emissions in Ontario, followed by another chart with the emissions of sulphur dioxide also in Ontario. The emission targets for the power sector were reviewed, as were the nitrogen oxide emission limits from 2002 to 2010. The major features of the Ontario legislation were discussed, covering allowance allocation, unlimited banking and limited provisions for credit. Ontario fossil capacity was reviewed, followed by emission allowance allocation. The issues and risks for Independent Power Producers were discussed. They included the emission rate compared to that of the competition, how much the facility was run last year and how much you expect to run it next year, the possibility of buying allowances or credits and at what cost. Looking to the future, the government of Ontario has announced bold actions on industry emissions. The initiatives include consultations, emission limits for both nitrogen oxide and sulphur dioxide from all major industrial emitters, and tighter province-wide targets and timelines for nitrogen oxide and sulphur dioxide. refs., tabs., figs

Forecasting the Allocative Efficiency of Carbon Emission Allowance Financial Assets in China at the Provincial Level in 2020

Directory of Open Access Journals (Sweden)

Shihong Zeng

2016-05-01

Full Text Available As the result of climate change and deteriorating global environmental quality, nations are under pressure to reduce their emissions of greenhouse gases per unit of GDP. China has announced that it is aiming not only to reduce carbon emission per unit of GDP, but also to consume increased amounts of non-fossil energy. The carbon emission allowance is a new type of financial asset in each Chinese province and city that also affects individual firms. This paper attempts to examine the allocative efficiency of carbon emission reduction and non-fossil energy consumption by employing a zero sum gains data envelopment analysis (ZSG-DEA model, given the premise of fixed CO2 emissions as well as non-fossil energy consumption. In making its forecasts, the paper optimizes allocative efficiency in 2020 using 2010 economic and carbon emission data from 30 provinces and cities across China as its baseline. An efficient allocation scheme is achieved for all the provinces and cities using the ZSG-DEA model through five iterative calculations.

Emissions trading in China: A conceptual 'leapfrog' approach?

International Nuclear Information System (INIS)

Raufer, Roger; Li, Shaoyi

2009-01-01

China is well aware of the advantages of quantity-based economic instruments (i.e., emissions trading) for domestic pollution control, but pilot studies and experimental programs in Taiyuan, Hong Kong/Guangdong, and other locations have not been successful. This paper proposes a very different type of emissions trading program, designed with Chinese implementation concerns in mind. It has three component parts: (1) a real-time intermittent control system (ICS) strategy designed to address public health concerns in the near term; (2) software-oriented Predictive emissions monitoring systems (PEMS) targeting process parameter (rather than emission) reporting from individual emission sources; and (3) real-time emissions markets responding to the ICS constraint. The technical and political difficulties associated with implementing such a system are recognized as daunting. However, such an approach would 'leapfrog' over existing systems, allowing the country to develop a comprehensive air pollution control strategy as economic growth occurs, continuously improving air quality in a cost efficient manner, utilizing both advanced technology and market-based control approaches in a manner consistent with China's unique environmental needs. It would also lay the groundwork for the eventual pricing of CO 2 and other greenhouse gases within China.

Internalizing carbon costs in electricity markets: Using certificates in a load-based emissions trading scheme

International Nuclear Information System (INIS)

Gillenwater, Michael; Breidenich, Clare

2009-01-01

Several western states have considered developing a regulatory approach to reduce greenhouse gas (GHG) emissions from the electric power industry, referred to as a load-based (LB) cap-and-trade scheme. A LB approach differs from the traditional source-based (SB) cap-and-trade approach in that the emission reduction obligation is placed upon Load Serving Entities (LSEs), rather than electric generators. The LB approach can potentially reduce the problem of emissions leakage, relative to a SB system. For any of these proposed LB schemes to be effective, they must be compatible with modern, and increasingly competitive, wholesale electricity markets. LSE's are unlikely to know the emissions associated with their power purchases. Therefore, a key challenge for a LB scheme is how to assign emissions to each LSE. This paper discusses the problems with one model for assigning emissions under a LB scheme and proposes an alternative, using unbundled Generation Emission Attribute Certificates. By providing a mechanism to internalize an emissions price signal at the generator dispatch level, the tradable certificate model addresses both these problems and provides incentives identical to a SB scheme

Multi-period emissions trading in the electricity sector-winners and losers

International Nuclear Information System (INIS)

Bode, Sven

2006-01-01

In the context of controlling greenhouse gas emissions, the directive on a Europe-wide trading scheme may be perceived as one of the most important milestones in recent years. Prior to its start, however, a number of very specific design features have to be agreed upon. Regarding the allocation of allowances, a distribution (almost) free of charge seems to be the most likely choice. An aspect that has interestingly attracted little attention in the past is the question of how to allocate emission rights over time. The following paper analyses different allocation options in multi-period emissions trading that are currently discussed in the European context. The options are applied for the electricity sector which is simulated over two periods. The paper distinguishes between a market effect of emissions trading and compliance costs for meeting the emission reduction obligation. The market effect results from a price increase which is due to the fact that opportunity costs for using allowances must be considered. It turns out that the electricity sector as a whole gains from the introduction of the instrument due to the increase of the electricity price. With regard to the different allocation options, it is found that utilities have different preferences depending on the fuel used

The timeline of trading frictions in the European carbon market

International Nuclear Information System (INIS)

Medina, Vicente; Pardo, Ángel; Pascual, Roberto

2014-01-01

During its trial phase (Phase I), the EU Greenhouse Gas Emission Trading Scheme (EU-ETS) collapsed because of an over-allocation of emission allowances. We evaluate the progress of this market from the trial phase to the next commitment period (Phase II) from a microstructure angle. We show that trading frictions, as measured by the relative spread, information-asymmetry risk, and market-making profits decreased from Phase I to Phase II. Although volatility decreased, its noise-related component gained in importance at the expense of its information-related component, resulting in lower quality of the price changes. - Highlights: • We compare Phases I and II of the EU-ETS from a microstructure angle. • Phase II shows lower spreads, information-asymmetry risk and market making profits. • The contribution of noise to the volatility of prices increased during Phase II

Buyer Liability and Voluntary Inspections in International Greenhouse Gas Emissions Trading. A Laboratory Study

International Nuclear Information System (INIS)

Cason, T.N.

2003-01-01

This paper reports a preliminary laboratory experiment in which traders make investments to increase the reliability of tradable instruments that represent greenhouse gas emissions allowances. In one half of the sessions these investments are unobservable, while in the other half traders can invite costless and accurate inspections that make reliability investments public. We implement a buyer liability rule, so that if emissions reductions are unreliable (i.e., sellers default), the buyer of the allowances cannot redeem them to cover emissions. We find that allowing inspections significantly increases the reliability investment rate and overall efficiency. Prices of uninspected allowances usually trade at a substantial discount due to the buyer liability rule, which provides a strong market incentive for sellers to invest in reliability

Conditional transfer of emission rights. Not a good idea; Voorwaardelijke overdraagbaarheid emissierechten. Geen goede gedachte

Energy Technology Data Exchange (ETDEWEB)

Van Engelen, Th.C.J.A. [Clifford Chance LLP, Amsterdam (Netherlands)

2004-02-01

The Dutch government embraces the idea that trading of emission allowances is a useful way of reducing the emission of harmful gasses. In the current plans to amend the Environmental Management Act, however, the legislator has chosen for a system where allowances may only be transferred in accordance with strict conditions. These conditions do not provide a legal framework for an efficient emission allowances trading market. As a result, Dutch industry will potentially be placed in an unfavourable position. The legislator, it is suggested, should opt for fully transferable allowances. It is crucial that an efficient international market for trading in allowances is established. This means that it should be possible to trade these allowances easily, without excessive legal restrictions. The aim of the legislator is to prevent extreme situations in this market. While its concerns are valid, however, the legislator has missed the mark by choosing a system whereby transfer of allowances is subject to excessive conditions. The legal consequence of not fulfilling one or more of the conditions during the sale is that the allowance will not be legally transferred, and the seller will remain the proprietor of the allowance, without either the seller or the buyer being aware of the situation. It is clear that this would be an unworkable situation as it would not be possible from a practical angle to simply and quickly check previous transactions. Overall, this would result in high transactions costs, which in turn would be a barrier to an efficient market. In summary, an efficient market in emission allowances seems to be an illusion if the transfer of allowances are subject to such conditions as are presently envisaged by the law. It is suggested that the legislator can reach its goals by dropping the conditions for transfers and by supervising the transactions through administrative and criminal procedures instead. This will not affect the owners-hip of emission allowances

Does a regional greenhouse gas policy make sense? A case study of carbon leakage and emissions spillover

International Nuclear Information System (INIS)

Chen, Yihsu

2009-01-01

The Regional Greenhouse Gas Initiative (RGGI) is a state-level effort by ten northeast states in the U.S. to control CO 2 emissions from the electric sector. The approach adopted by RGGI is a regional cap-and-trade program, which sets a maximal annual amount of regional CO 2 emissions that can be emitted from the electric sector. However, incoherence of the geographic scope of the regional electricity market is expected to produce two undesirable consequences: CO 2 leakage and NO x and SO 2 emissions spillover. This paper addresses these two issues using transmission-constrained electricity market models. The results show that although larger CO 2 leakage is associated with higher allowance prices, it is negatively related to CO 2 prices if measured in percentage terms. On the other hand, SO 2 and NO x emissions spillover increase in commensurate with CO 2 allowance prices. Demand elasticity attenuates the effect of emissions trading on leakage and emissions spillover. This highlights the difficulties of designing a regional or local climate policy. (author)

Beyond pure offsetting: Assessing options to generate Net-Mitigation-Effects in carbon market mechanisms

International Nuclear Information System (INIS)

Warnecke, Carsten; Wartmann, Sina; Höhne, Niklas; Blok, Kornelis

2014-01-01

The current project-based carbon market mechanisms such as the Clean Development Mechanism (CDM) and the Joint Implementation (JI) do not have a direct impact on global greenhouse gas emission levels, because they only replace or offset emissions. Nor do they contribute to host country's national greenhouse gas emission reduction targets. Contributions to net emission reductions in host countries is likely to become mandatory in new mechanisms under development such as in the framework for various approaches, a new market-based mechanism and even in a reformed JI. This research analysed the question if approaches for carbon market-based mechanisms exist that allow the generation of net emission reductions in host countries while keeping project initiation attractive. We present a criteria-based assessment method and apply it for four generic options in existing mechanisms and derive implications for future mechanism frameworks. We identified the application of “discounts” on the amount of avoided emissions for the issuance of carbon credits and “standardisation below business as usual” as most promising options over “limiting the crediting period” and “over-conservativeness”. We propose to apply these options differentiated over project types based on internal rate of return to ensure cost-efficiency and attractiveness. - Highlights: • Options for net emission reductions of market-based mechanisms are assessed. • Research combines past and current views for project and sector-based mechanisms. • Implementation ensures initiation of mitigation activities is not discouraged. • Important insights for methodological design of new market-based mechanisms. • Profitability-based approach for project-based mechanisms suggested

Dynamic reallocation of marketable nitrogen emission permits in Danish freshwater aquaculture

DEFF Research Database (Denmark)

Nielsen, Rasmus; Andersen, Jesper Levring; Bogetoft, Peter

2014-01-01

farms are gradually introduced to the industry over 10 years. The new industry structure, production, and profitability gains are investigated, and the effect of changing the overall level of nitrogen emission is analyzed. Our results show that there is scope for a more efficient allocation of resources...... to either increase the production level or to reduce the emission level. This article adds to the literature by extending previous static reallocation models to a dynamic model, which allows for a gradual introduction of new firms. This makes it possible for managers to analyze the effects of reallocating...

Low-Carbon Natural Gas for Transportation: Well-to-Wheels Emissions and Potential Market Assessment in California

Energy Technology Data Exchange (ETDEWEB)

Penev, Michael [National Renewable Energy Lab. (NREL), Golden, CO (United States); Melaina, Marc [National Renewable Energy Lab. (NREL), Golden, CO (United States); Bush, Brian [National Renewable Energy Lab. (NREL), Golden, CO (United States); Muratori, Matteo [National Renewable Energy Lab. (NREL), Golden, CO (United States); Warner, Ethan [National Renewable Energy Lab. (NREL), Golden, CO (United States); Chen, Yuche [National Renewable Energy Lab. (NREL), Golden, CO (United States)

2016-12-01

This report improves on the understanding of the long-term technology potential of low-carbon natural gas (LCNG) supply pathways by exploring transportation market adoption potential through 2035 in California. Techno-economic assessments of each pathway are developed to compare the capacity, cost, and greenhouse gas (GHG) emissions of select LCNG production pathways. The study analyzes the use of fuel from these pathways in light-, medium-, and heavy-duty vehicle applications. Economic and life-cycle GHG emissions analysis suggest that landfill gas resources are an attractive and relatively abundant resource in terms of cost and GHG reduction potential, followed by waste water treatment plants and biomass with gasification and methanation. Total LCNG production potential is on the order of total natural gas demand anticipated in a success scenario for future natural gas vehicle adoption by 2035 across light-, medium-, and heavy-duty vehicle markets (110 trillion Btu/year).

The European electricity market. What are the effects of market power on prices and the environment? Keywords: Electricity market; liberalisation; market power; game theory; environmental impacts; Northwestern Europe

International Nuclear Information System (INIS)

Lise, W.

2005-07-01

This paper presents a static computational game theoretic COMPETES model. This model is used to study the economic and environmental effects of the liberalisation of the European electricity market. The COMPETES model takes strategic interaction into account. The model is calibrated to four European countries: Belgium, France, Germany and the Netherlands. To analyse the impact of emission trading, a fixed permit price per tonne CO2 emissions is introduced. The effects are studied under different market structures depending on the ability of firms to exercise market power. The results indicate that the effects of liberalisation depend on the resulting market structure, while a reduction in market power of large producers may be beneficial for the consumer (i.e. lower prices), this is not necessarily true for the environment (i.e. lower reduction in CO2 emissions)

Self-scheduling and bidding strategies of thermal units with stochastic emission constraints

International Nuclear Information System (INIS)

Laia, R.; Pousinho, H.M.I.; Melíco, R.; Mendes, V.M.F.

2015-01-01

Highlights: • The management of thermal power plants is considered for different emission allowance levels. • The uncertainty on electricity price is considered by a set of scenarios. • A stochastic MILP approach allows devising the bidding strategies and hedging against price uncertainty and emission allowances. - Abstract: This paper is on the self-scheduling problem for a thermal power producer taking part in a pool-based electricity market as a price-taker, having bilateral contracts and emission-constrained. An approach based on stochastic mixed-integer linear programming approach is proposed for solving the self-scheduling problem. Uncertainty regarding electricity price is considered through a set of scenarios computed by simulation and scenario-reduction. Thermal units are modelled by variable costs, start-up costs and technical operating constraints, such as: forbidden operating zones, ramp up/down limits and minimum up/down time limits. A requirement on emission allowances to mitigate carbon footprint is modelled by a stochastic constraint. Supply functions for different emission allowance levels are accessed in order to establish the optimal bidding strategy. A case study is presented to illustrate the usefulness and the proficiency of the proposed approach in supporting biding strategies

A system dynamics analysis of the Nordic electricity market: The transition from fossil fuelled toward a renewable supply within a liberalized electricity market

Energy Technology Data Exchange (ETDEWEB)

Vogstad, Klaus-Ole

2005-07-01

A system dynamic model to analyze long-term versus short-term implications of various energy policies within the context of the Nordic electricity market has been developed. The model itself provides a theory of the development of the Nordic electricity market in response to various energy policies, both in the long and the short term. The model includes generation scheduling, demand, price formation, investment decisions, resource availability and to some extent technology progress as endogenous. Thus, explanations of the model behaviour can be found from within the model. As examples of use, the model/modelling concept addresses two important questions on the energy policy agenda. First the marginal C02-emission controversy has been study, whether building gas power in Norway increase or reduce Nordic C02-emissions. The results were that in the short run, some emission reductions can be obtained due to substitution of existing coal units by operations of the market, but this effect was found to be modest. Existing gas power is also substituted, plus some bio. In the long run, there are also some investment substitutions of renewables. These effects do not appear to be significant in the short run, but in the long run, the investment rate of renewables is reduced as a consequence of reduced prices from gas. The reduced investments in renewables results in increased emissions. Some increase in demand is also to be expected from adding gas power, due to price-elasticity of demand. The net result is that gas power is likely to increase C02-emissions, which contradicts the current belief as well as results from other electricity market models that omit the long-term mechanisms such as investment decisions and technology progress. The second study analyzed the current Swedish TGC market at the time of the introduction. The purpose was to assist market design. It was found that the current Swedish TGC market design is likely to crash, due to the slow adjustment of the

A system dynamics analysis of the Nordic electricity market: The transition from fossil fuelled toward a renewable supply within a liberalized electricity market

International Nuclear Information System (INIS)

Vogstad, Klaus-Ole

2005-01-01

A system dynamic model to analyze long-term versus short-term implications of various energy policies within the context of the Nordic electricity market has been developed. The model itself provides a theory of the development of the Nordic electricity market in response to various energy policies, both in the long and the short term. The model includes generation scheduling, demand, price formation, investment decisions, resource availability and to some extent technology progress as endogenous. Thus, explanations of the model behaviour can be found from within the model. As examples of use, the model/modelling concept addresses two important questions on the energy policy agenda. First the marginal C02-emission controversy has been study, whether building gas power in Norway increase or reduce Nordic C02-emissions. The results were that in the short run, some emission reductions can be obtained due to substitution of existing coal units by operations of the market, but this effect was found to be modest. Existing gas power is also substituted, plus some bio. In the long run, there are also some investment substitutions of renewables. These effects do not appear to be significant in the short run, but in the long run, the investment rate of renewables is reduced as a consequence of reduced prices from gas. The reduced investments in renewables results in increased emissions. Some increase in demand is also to be expected from adding gas power, due to price-elasticity of demand. The net result is that gas power is likely to increase C02-emissions, which contradicts the current belief as well as results from other electricity market models that omit the long-term mechanisms such as investment decisions and technology progress. The second study analyzed the current Swedish TGC market at the time of the introduction. The purpose was to assist market design. It was found that the current Swedish TGC market design is likely to crash, due to the slow adjustment of the

Key Questions for Achieving EU Emission Reductions without Abandoning Other Energy Goals

International Nuclear Information System (INIS)

Stang, G.

2014-01-01

What considerations must be addressed to ensure that efforts to achieve the EU's new 2030 emissions and renewables targets are compatible with the other energy goals of the EU and its member states: energy security, and energy affordability? How should these other energy goals be addressed when pursuing energy efficiency improvements, upgrading electricity systems to handle different renewable energy sources, and developing policies to reduce overall CO2 emissions? Markets have been defined as being central to achieving all of Europe's energy goals - both the creation of an EU internal energy market and the use of the Emissions Trading System (ETS) to allow a market for managing a portion of the continent's greenhouse gas emissions. But once these markets are in place and operational, there will still be great variances among the goals, instruments, and level of market integration available for the different countries and regions of Europe. Choosing the most cost effective mechanisms for pursuing the new goals will require effective use of the flexibility that is available - an improved ETS, tradable national targets for non-ETS emissions, and a rapidly widening array of cost-effective renewable energy options. Sufficient use of this flexibility should facilitate the flow of energy investments toward energy system improvements where there is low-hanging fruit - anywhere in the continent - without requiring that local or continental energy security goals be sacrificed. (author).

Implementing a system of emissions trading to manage GHGs; La mise en oeuvre des systemes de quotas d'emission echangeables dans la gestion des emissions de GES

Energy Technology Data Exchange (ETDEWEB)

Webster, A. [Sherbrooke Univ., PQ (Canada)

2005-06-01

The exact geographical location of greenhouse gas (GHG) emissions has no bearing on climate change. In this context the Kyoto Protocol recognizes mechanisms of flexibility for countries to attain their GHG emissions reductions. Emission trading takes advantage of this flexibility, allowing GHGs to be sold, traded, or stockpiled. An emission quota allows the owner of an energy facility to emit a certain amount of GHGs throughout the year. If this quota is not used, it can be stockpiled for the following year or it could be traded to another enterprise and owner. If the amount of emissions exceeds the initial quotas, facilities can adopt different strategies, such as reducing their GHG purchasing quotas from national enterprises that have reduced their emissions or purchase quotas from international markets. The initial allocation of quotas is an important political decision since it determines the initial distribution of the GHG reduction effort. The establishment of a quota system can contribute to economical competition and can be used to fulfill environmental objectives regarding energy source development. It is also the most effective way to minimize greenhouse gas emissions and the associated environmental impacts. This paper reviewed the regulations regarding the design of the quota system; how the ceiling of emission levels was determined; the criteria for allocating the quotas and the rules for the exchange of emission quotas. Canada and the European countries have expressed interest in this system of emissions trading. 7 refs.

Compulsory procurement of emission allowances. How will things will continue after the Copenhagen conference?; Emissionszertifikatepflichten fuer Kraftwerke. Wie geht es weiter nach der Kopenhagen-Konferenz?

Energy Technology Data Exchange (ETDEWEB)

Telke, Juergen [Kiel Univ. (Germany). Rechtswissenschaftliche Fakultaet

2010-03-15

German power plants are obliged to hold emission allowances for their carbon dioxide emissions. This obligation is largely established by the Kyoto Protocol, which was approved in 1997 and entered into force in 2005 and which specifies binding emission reduction goals for 37 industrial states. Because this agreement is only valid until the end of 2012, negotiations were held for a follow-on agreement in Copenhagen in mid-December 2009. This article explains the current legal situation as laid down in the Kyoto Protocol and the EU Emission Trade Directive that followed from it. It goes on to analyse the impact of the Copenhagen conference on the emission allowance trade and gives appropriate recommendations for action for German power plants.

An emerging equilibrium in the EU emissions trading scheme

International Nuclear Information System (INIS)

Bredin, Don; Muckley, Cal

2011-01-01

The European Union's Emissions Trading Scheme (ETS) is the key policy instrument of the European Commission's Climate Change Program aimed at reducing greenhouse gas emissions to eight percent below 1990 levels by 2012. A critically important element of the EU ETS is the establishment of a market determined price for EU allowances. This article examines the extent to which several theoretically founded factors including, economic growth, energy prices and weather conditions determine the expected prices of the European Union CO 2 allowances during the 2005 through to the 2009 period. The novel aspect of our study is that we examine heavily traded futures instruments that have an expiry date in Phase 2 of the EU ETS. Our study adopts both static and recursive versions of the Johansen multivariate cointegration likelihood ratio test as well as a variation on this test with a view to controlling for time varying volatility effects. Our results are indicative of a new pricing regime emerging in Phase 2 and point to a maturing market driven by the fundamentals. These results are valuable both for traders of EU allowances and for those policy makers seeking to improve the design of the European Union ETS.

Coal sulfur-premium models for SO2 allowance valuation

International Nuclear Information System (INIS)

Henry, J.B. II; Radulski, D.R.; Ellingson, E.G.; Engels, J.P.

1995-01-01

Clean Air Capital Markets, an investment bank structuring SO 2 Allowance transactions, has designed two allowance value models. The first forecasts an equilibrium allowance value based on coal supply and demand. The second estimates the sulfur premium of all reported coal deliveries to utilities. Both models demonstrate that the fundamental allowance value is approximately double current spot market prices for small volumes of off-system allowances

Climate Change and Agriculture: Can market governance mechanisms reduce emissions from the food system fairly and effectively?

Energy Technology Data Exchange (ETDEWEB)

Garnett, Tara

2012-05-15

Climate and agriculture are inextricably linked: the climate affects agricultural production and is itself affected by agricultural emissions. Agriculture is responsible for 30 per cent of global greenhouse gas emissions. How agriculture is practised therefore has significant potential for mitigating climate change, for providing food security and for improving the livelihoods of millions of food producers worldwide. There is growing interest in the use of market governance mechanisms for tackling climate change by giving the financial incentives to make the kinds of changes that are required. But how widely are these mechanisms being used in agriculture, and are they effective in reducing emissions? What impact do they have on adaptation and other aspects of sustainable development? Are they able to balance the competing demands of producers and consumers, the environment and food security? The key messages emerging from this study are that economic measures have a vital part to play within this regulatory context, but they need to be designed with care. To be effective, emissions from food production and consumption must be addressed together. If not, emissions reduced in one region will simply be displaced elsewhere. A balance needs to be struck by applying a mix of approaches – regulatory, economic, voluntary, and information: no single measure will be effective in achieving emissions reductions on its own. 'Soft' measures, such as voluntary agreements and information have a part to play in providing an enabling context for action, but they must be backed up by 'harder' regulatory or economic measures. Regulation, in the form of a cap on emissions, is a prerequisite for other market governance measures to function well. To be effective, MGMs need to consider the social, cultural and economic context within which they operate.

The impacts of policy mix for resolving overcapacity in heavy chemical industry and operating national carbon emission trading market in China

International Nuclear Information System (INIS)

Li, Wei; Lu, Can; Ding, Yi; Zhang, Yan-Wu

2017-01-01

Highlights: •A STIRPAT embed dynamic CGE model is utilized to evaluate the whole impact. •Economy and trade increased slightly under scenario shock. •Global carbon emission reduction rate ranges from 3.33% to 7.46%. •Carbon emission peaks in 2022, 2024, 2026 beyond simulating scenarios. •Energy intensity decreases 19.58–23.71% upon 2020 in contrast with 2015. -- Abstract: In place to reduce greenhouse gas emission efficiently and accomplish carbon emission peak destination ahead of 2030, a variety of policy-based interventions grounded in optimizing energy structure and boosting emission mitigation have been put forward to target carbon-and resource-intensive enterprises across China. Both defusing overcapacity in heavy chemical industry and constructing national carbon trading market are recently attached with a stronger significant importance. A STIRPAT (Stochastic Impacts by Regression on Population, Affluence, and Technology) embed dynamic CGE (computable general equilibrium) model is applied in this study to evaluate the simulation effects focusing on China’s economy, energy, and household lifestyle. We devise nine scenarios in terms of the two aforementioned mitigation strategies. The results indicate that, the optimal policy mix, balancing economic improvement, energy mix readjustment, and emission reduction to the maximize value, is founded to be declining the proportion of heavy chemical industry capacity with an annual average level of 3%, 1%, 1%, stipulating carbon price in 5.8 dollar/ton, 11.6 dollar/ton, 14.5 dollar/ton, and distributing annual carbon allowance as 3.5 billion ton, 7 billion ton, 9 billion ton during 2017–2020, 2021–2025, and 2026–2030 respectively.

Interactions of Reduced Deforestation and the Carbon Market: The Role of Market Regulations and Future Commitments

OpenAIRE

Anger, Niels; Dixon, Alistair; Livengood, Erich

2009-01-01

Reducing emissions from deforestation and degradation (REDD) has been proposed as a potentially inexpensive and plentiful source of emission abatement to supplement other longterm climate policies. However, critics doubt that REDD credits are environmentally equivalent to domestic emission reductions, and suggest an excess supply may disrupt carbon markets. In this context, we investigate the economic implications of emissions market regulations and future emissions reduction commitments, as ...

“Lock-in” effect of emission standard and its impact on the choice of market based instruments

International Nuclear Information System (INIS)

Haoqi, Qian; Libo, Wu; Weiqi, Tang

2017-01-01

A country's existing emission standard policy will lead to a “lock in” effect. When the country plans to adopt new market-based instruments to control greenhouse gas emissions, it must consider this effect as it chooses among instruments to avoid larger efficiency loss. In this paper, we find that the “lock in” effect will cause a kink point to occur on the marginal abatement cost (MAC) curve. This change of shape for the MAC curve reminds us to be cautious in choosing market-based instruments when applying Weitzman's rule. We also introduce this concept into a dynamic multi-regional computable general equilibrium (CGE) model for China and simulate MAC curves for all regions. After applying Weitzman's rule, we propose a timeline for introducing price instruments under different marginal benefit (MB) curve scenarios. - Highlights: • China's existing carbon intensity policy has a “lock-in” effect and leads to a “kink point” on MAC. • A dynamic inter-regional CGE model is developed to simulate the regional kinked MAC curves in China. • A timeline of introducing new market based instrument is proposed by combining different MB scenarios.

Emission trading: A discussion paper

International Nuclear Information System (INIS)

1992-05-01

Emission trading is a market-based incentive program designed to control air emissions in which a cap is placed on the total quantity of pollutants allowed to be emitted in an airshed. Appropriate shares of this amount are allocated among participating emission sources, and participants can buy or sell their shares. Advantages of emission trading include its potential to achieve air emission targets at a lower cost than the traditional command and control approach, and its ability to accommodate economic growth without compromising environmental quality. A study was conducted to evaluate the potential use of emission trading programs to achieve emission reduction goals set for nitrogen oxides, volatile organic compounds (VOC), and sulfur oxides. Emission trading programs in the USA are reviewed and a set of factors important for the success of emission trading are identified. Key policy and design issues related to an emission trading program are identified, explained, and discussed. Administrative issues are then analyzed, such as legislative authority, monitoring and enforcement requirements, and trading between jurisdictions. A preliminary assessment of emission trading for control of NOx and VOC in the Lower Fraser Valley indicates that emission trading would be feasible, but legislative authority to implement such a program would have to be introduced

Potential impact of (CET) carbon emissions trading on China’s power sector: A perspective from different allowance allocation options

OpenAIRE

Cong, Rong-Gang; Wei, Yi-Ming

2010-01-01

In Copenhagen climate conference China government promised that China would cut down carbon intensity 40e45% from 2005 by 2020. CET (carbon emissions trading) is an effective tool to reduce emissions. But because CET is not fully implemented in China up to now, how to design it and its potential impact are unknown to us. This paper studies the potential impact of introduction of CET on China’s power sector and discusses the impact of different allocation options of allowances. Agent-based mod...

17 CFR 190.07 - Calculation of allowed net equity.

Science.gov (United States)

2010-04-01

...; and (iii) The current realizable market value, determined as of the close of the market on the last... 17 Commodity and Securities Exchanges 1 2010-04-01 2010-04-01 false Calculation of allowed net... BANKRUPTCY § 190.07 Calculation of allowed net equity. Allowed net equity shall be computed as follows: (a...

The Effect of Emission Permits and Pigouvian Taxes on Market Structure

Energy Technology Data Exchange (ETDEWEB)

Bunuel, M.

2001-07-01

Differently from Pigouvian taxes and direct regulation, tradable emission permits can decrease competition in a polluting industry under certain circumstances. Assume a potential entrant who can buy every permit. When permits are given free to current polluters, monopolization occurs if not every polluter foresees it. If foreseen, polluters want to free ride on the entrant's market power, but entry can still occur, although not with certainty. Considering a symmetric, mixed-strategy equilibrium with unconditional bids, the probability of entry decreases as the number of polluters increase. When permits are sold initially, monopolization occurs without more requirements than polluters being financially constrained. (Author)

Emissions trading comes of age as a strategic tool

International Nuclear Information System (INIS)

Pospisil, R.

1996-01-01

Trading of emissions credits has quickly evolved from a curiosity to a viable compliance strategy for electric utilities and power-generating industrial firms. A sure sign that emissions trading has matured is the entry of power marketers onto the scene; in bundling pollution allowances with their electricity offerings, they are making their product more attractive - and stealing a page from the coal companies' strategy book to boot. Although most current activity involves credits for sulfur dioxide (SO 2 ), nitrogen oxide (NO x ) trading is under way in certain areas as well, although NO x markets are local and thus slower to develop. However, utilities see economic development potential in this area; some are providing NO x credits to their industrial customers to help them comply with environmental regulations - and to retain their loyalty when deregulation affords them a choice of electricity suppliers. This paper briefly discusses the issues related to emissions trading

Emissions credits from natural gas vehicles

International Nuclear Information System (INIS)

Anderson, J.F.; Kodjak, D.

1997-01-01

Dedicated natural gas vehicles (NGVs) often are capable of testing to lower than federally required engine certification standards. NGVs often meet inherently low emission vehicle (ILEV) and ultra low emission vehicle (ULEV) standards. Over the useful life of the vehicle, a significant amount of mobile source emission reduction credits (MSERCs) can be generated. This paper will discuss key elements of establishing a workable methodology to quantify the emissions benefits generated through the purchase and use of heavy-duty natural gas vehicles instead of heavy-duty diesel vehicles. The paper will focus on a public fleet of transit buses owned by the Massachusetts Bay Transit Agency, the Massachusetts Port Authority, and a private fleet of waste haulers. Public fleets may generate emission credits as a key compliance option to offset emission shortfalls from changes to the Employee Commute Options (ECO) program, the Inspection and Maintenance program, and facilitate annual surface transportation conformity. Private fleets may generate emission credits for open market trading to area and stationary sources seeking to buy credits from mobile sources, where allowed by EPA and state policy

Voluntary emission trading potential of Turkey

International Nuclear Information System (INIS)

Ari, İzzet

2013-01-01

Climate change is likely to cause serious market failures, and carbon trading as a market instrument can help correct its negative impacts. The global carbon markets established to combat climate change include regulatory and voluntary markets. Turkey cannot utilise regulatory carbon markets under the Kyoto Protocol. As a result of her unique position in the UNFCCC, some offsetting projects in Turkey have benefitted only voluntary emission trading for the reduction of GHG emissions. Due to on-going climate change negotiation under the UNFCCC, it seems that Turkey will not use the current regulatory carbon markets. Thus, Turkey should promote the use of and participation in voluntary carbon markets. In this article, emission reduction potential via energy efficiency, renewable energy and solid waste management, and corresponding offsetting of credits with their estimated prices is investigated for the period between 2013 and 2020. The emission reduction potential for energy efficiency, renewable energy and solid waste management projects are estimated at 403, 312 and 356 million tons of CO 2 equivalent emissions respectively, totalling 1,071 million tons of CO 2 equivalent. The total revenue of the carbon certificates are estimated in the range of 19,775–33,386 million US Dollars for the same period. -- Highlights: •Turkey has 1,071 million tons GHG emission reduction in three sectors for 2013–2020. •Turkey can only use voluntary emission trading for reduction of GHGs. •Total revenue estimation could be between 19,775 and 33,386 million US Dollars. •Turkey's economy and emissions have been rapidly growing. •Turkey can more easily reduce its emission by using voluntary emission trading

In silico regenerative medicine: how computational tools allow regulatory and financial challenges to be addressed in a volatile market.

Science.gov (United States)

Geris, L; Guyot, Y; Schrooten, J; Papantoniou, I

2016-04-06

The cell therapy market is a highly volatile one, due to the use of disruptive technologies, the current economic situation and the small size of the market. In such a market, companies as well as academic research institutes are in need of tools to advance their understanding and, at the same time, reduce their R&D costs, increase product quality and productivity, and reduce the time to market. An additional difficulty is the regulatory path that needs to be followed, which is challenging in the case of cell-based therapeutic products and should rely on the implementation of quality by design (QbD) principles. In silico modelling is a tool that allows the above-mentioned challenges to be addressed in the field of regenerative medicine. This review discusses such in silico models and focuses more specifically on the bioprocess. Three (clusters of) examples related to this subject are discussed. The first example comes from the pharmaceutical engineering field where QbD principles and their implementation through the use of in silico models are both a regulatory and economic necessity. The second example is related to the production of red blood cells. The described in silico model is mainly used to investigate the manufacturing process of the cell-therapeutic product, and pays special attention to the economic viability of the process. Finally, we describe the set-up of a model capturing essential events in the development of a tissue-engineered combination product in the context of bone tissue engineering. For each of the examples, a short introduction to some economic aspects is given, followed by a description of the in silico tool or tools that have been developed to allow the implementation of QbD principles and optimal design.

Allowable CO2 emissions based on regional and impact-related climate targets: The role of land processes

Science.gov (United States)

Seneviratne, S. I.; Donat, M.; Pitman, A.; Knutti, R.; Wilby, R.; Vogel, M.; Orth, R.

2016-12-01

Global temperature targets, such as the widely accepted "2° and 1.5° targets", may fail to communicate the urgency of reducing CO2 emissions because they are disconnected from their implications. The translation of CO2 emissions into regional- and impact-related climate targets is more powerful because such targets are more directly aligned with individual national interests. A recent publication (Seneviratne et al. 2016, Nature) reveals that regional changes in extreme temperatures and precipitation scale robustly with global temperature across scenarios, and thus with cumulative CO2 emissions. They thus allow a better communication of implied regional impacts associated with global targets for CO2 emissions. However, the regional responses are very varied and display strong differences in regional temperature and hydrological sensitivity. Process-based based analyses explain these divergences and highlight avenues for reducing uncertainties in regional projections of extremes, in particular related to the role of land-atmosphere feedbacks. These results have important implications for the design of regional mitigation and climate adaptation policies, for instance related to land use changes. Reference: Seneviratne, S.I., M.G. Donat, A.J. Pitman, R. Knutti, and R. Wilby, 2016, Nature, 529, 477-483, doi:10.1038/nature16542

Impacts of CO2 taxes in an Economy with Niche Markets and Learning-by-doing

International Nuclear Information System (INIS)

Van der Zwaan, B.C.C.; Gerlagh, R.; Hofkes, M.W.; Klaassen, G.

2003-09-01

In this paper, we analyse the impact of carbon taxes on emission levels, when niche markets exist for new carbon-free technologies, and when these technologies experience 'learning-by-doing' effects. For this purpose, a general equilibrium model has been developed, DEMETER, which specifies two energy technologies: one based on fossil fuels and one on a composite of carbon-free energy technologies. Initially, the carbon-free technology has relatively high production costs, but niche markets ensure positive demand. Learning-by-doing decreases production costs, which increases the market share, which in turn accelerates learning-by-doing, and so forth. This mechanism allows a relatively modest carbon tax, of about 50 US$/tC, to almost stabilise carbon emissions at their 2000 levels throughout the entire 21st century. Sensitivity analysis shows that the required carbon tax for emission stabilisation crucially depends on the elasticity of substitution between the fossil fuel and carbon-free technology

Responding to climate change and the global land crisis: REDD+, market transformation and low-emissions rural development.

Science.gov (United States)

Nepstad, Daniel C; Boyd, William; Stickler, Claudia M; Bezerra, Tathiana; Azevedo, Andrea A

2013-06-05

Climate change and rapidly escalating global demand for food, fuel, fibre and feed present seemingly contradictory challenges to humanity. Can greenhouse gas (GHG) emissions from land-use, more than one-fourth of the global total, decline as growth in land-based production accelerates? This review examines the status of two major international initiatives that are designed to address different aspects of this challenge. REDD+ is an emerging policy framework for providing incentives to tropical nations and states that reduce their GHG emissions from deforestation and forest degradation. Market transformation, best represented by agricultural commodity roundtables, seeks to exclude unsustainable farmers from commodity markets through international social and environmental standards for farmers and processors. These global initiatives could potentially become synergistically integrated through (i) a shared approach for measuring and favouring high environmental and social performance of land use across entire jurisdictions and (ii) stronger links with the domestic policies, finance and laws in the jurisdictions where agricultural expansion is moving into forests. To achieve scale, the principles of REDD+ and sustainable farming systems must be embedded in domestic low-emission rural development models capable of garnering support across multiple constituencies. We illustrate this potential with the case of Mato Grosso State in the Brazilian Amazon.

Revised emission factors for gas engines including start/stop emissions

Energy Technology Data Exchange (ETDEWEB)

Nielsen, Malene; Boll Illerup, J.; Birr-Petersen, K.

2008-06-15

Liberalisation of the electricity market has led to Danish gas engine plants increasingly converting to the spot and regulating power markets. In order to offer regulating power, plants need to be able to start and stop the engines at the plants quickly. The liberalisation causes a considerable change of operation practice of the engines e.g. less full load operation hours /year. The project provides an inventory determining the scale of the emissions during the start and stop sequence as well as proposals for engine modifications aimed at reducing start/stop emissions. This report includes calculation of emission factors as well as an inventory of total emissions and reduction potentials. (au)

Use green taxes and market instruments to reduce greenhouse gas emissions

International Nuclear Information System (INIS)

Hodgson, G.; Rheaume, G.; Coad, L.

2008-01-01

This briefing is part of the Conference Board of Canada's CanCompete program, which was designed to help leading decision makers advance Canada on a path of national competitiveness. Many members of the scientific community have concluded that anthropogenic greenhouse gas (GHG) emissions are responsible for the current pace of global warming. It is widely believed that the changing climate will have a negative impact on the economy and the environment. This briefing considered a set of reforms to the Canadian tax system designed to ensure sustainable growth within a changing climate. The briefing was prepared in response to an earlier paper calling for a market-based policy on climate change. Tax incentives were examined, as well as price signalling systems to ensure successful climate change adjustment for Canadian businesses. It was concluded that a combination of efficient regulations, market forces, and tax measures will be needed to set accurate and effective prices for GHGs. Green taxes and tax credits will also be necessary in order to accelerate technological adaptation to a carbon pricing system, along with a complementary cap and trade system. 1 fig

An optimal control model for reducing and trading of carbon emissions

Science.gov (United States)

Guo, Huaying; Liang, Jin

2016-03-01

A stochastic optimal control model of reducing and trading for carbon emissions is established in this paper. With considerations of reducing the carbon emission growth and the price of the allowances in the market, an optimal policy is searched to have the minimum total costs to achieve the agreement of emission reduction targets. The model turns to a two-dimension HJB equation problem. By the methods of reducing dimension and Cole-Hopf transformation, a semi-closed form solution of the corresponding HJB problem under some assumptions is obtained. For more general cases, the numerical calculations, analysis and comparisons are presented.

Inspection and market-based regulation through emissions trading. The striking reliance on self-monitoring, self-reporting and verification

International Nuclear Information System (INIS)

Peeters, M.

2006-01-01

This contribution discusses inspection with regard to emissions trading. It focuses on the EU greenhouse gas emissions trading scheme. The core rule of emissions trading is that industries need to cover their emissions with tradable emission rights. There are several options for the government to distribute those rights, basically through a free allocation or an auction. The need to cover emissions with a tradable right gives a financial incentive to firms to choose for the reduction of emissions, of course related to the market price of the tradable right. This price-incentive at the same time urges governments to put in place a sound enforcement approach. One of the characteristics of current emissions trading schemes is that they heavily rely on self-monitoring duties. Nevertheless, the ultimate responsibility to inspect rests on the government. However, with the introduction of emissions trading a remarkable shift takes place: instead of the more traditional control of the actual behaviour of industries, inspection by the government ranges under the greenhouse gas emissions-trading instrument much more towards the control of self-monitoring activities. The use of verifiers within the EU greenhouse gas emissions trading scheme is in this respect a unique new provision, but at the same time raises many practical and fundamental questions.

The impact of the EU ETS on prices, profits and emissions in the power sector. Simulation results with the COMPETES model

International Nuclear Information System (INIS)

Lise, W.; Sijm, J.; Hobbs, B.F.

2009-06-01

This paper analyses the impact of the EU Emissions Trading Scheme (ETS) on electricity wholesale in 20 European countries. The analyses show that the costs of (freely allocated) CO2 emission allowances are nearly fully passed through to power prices, which also depend on the structure of the power market, i.e., the incidence of market power, and the price responsiveness of power demand. Finally, the analyses show that internalization and pass-through of carbon costs are needed to reduce CO2 emissions by both changing the mix of power generation technologies and lowering total electricity demand

The impact of the EU ETS on prices, profits and emissions in the power sector. Simulation results with the COMPETES model

Energy Technology Data Exchange (ETDEWEB)

Lise, W. [IBS Research and Consultancy, Istanbul (Turkey); Sijm, J. [ECN Policy Studies, Petten (Netherlands); Hobbs, B.F. [Department of Geography and Environmental Engineering, Johns Hopkins University, Baltimore, Maryland (United States)

2009-06-15

This paper analyses the impact of the EU Emissions Trading Scheme (ETS) on electricity wholesale in 20 European countries. The analyses show that the costs of (freely allocated) CO2 emission allowances are nearly fully passed through to power prices, which also depend on the structure of the power market, i.e., the incidence of market power, and the price responsiveness of power demand. Finally, the analyses show that internalization and pass-through of carbon costs are needed to reduce CO2 emissions by both changing the mix of power generation technologies and lowering total electricity demand.

Multifractal features of EUA and CER futures markets by using multifractal detrended fluctuation analysis based on empirical model decomposition

International Nuclear Information System (INIS)

Cao, Guangxi; Xu, Wei

2016-01-01

Basing on daily price data of carbon emission rights in futures markets of Certified Emission Reduction (CER) and European Union Allowances (EUA), we analyze the multiscale characteristics of the markets by using empirical mode decomposition (EMD) and multifractal detrended fluctuation analysis (MFDFA) based on EMD. The complexity of the daily returns of CER and EUA futures markets changes with multiple time scales and multilayered features. The two markets also exhibit clear multifractal characteristics and long-range correlation. We employ shuffle and surrogate approaches to analyze the origins of multifractality. The long-range correlations and fat-tail distributions significantly contribute to multifractality. Furthermore, we analyze the influence of high returns on multifractality by using threshold method. The multifractality of the two futures markets is related to the presence of high values of returns in the price series.

A Future Market Reduces Bubbles but Allows Greater Profit for More Sophisticated Traders

NARCIS (Netherlands)

Noussair, C.N.; Tucker, S.; Xu, Yilong

2014-01-01

We study the effect of the addition of a futures market, in which contracts maturing in the last period of the life of the asset can be traded. Our experiment has two treatments, one in which a spot market operates on its own, and a second treatment in which a spot and futures market are active

Fuels: market, quality, emissions in France

International Nuclear Information System (INIS)

Philippon, A.

1997-01-01

Here is a study about the automobile fuels market. From the market trends, we find the evolution of fuels quality; but in front of the concurrence and with the imbalance between diesel fuels and gasoline fuels, the improvement in fuels quality that requires investments does not increase as well as the air quality should necessitate. (N.C.)

Developing an urban forest carbon market

Science.gov (United States)

M. Armstrong; J. Siry; Michael Bowker

2009-01-01

Countries, states, localities, businesses, and individuals are taking action to mitigate greenhouse gas levels and production as a response to concerns over climate change. Europe currently has mandatory greenhouse gas emission legislation and a large developed emission trading market, as opposed to the U.S. where voluntary markets to reduce green house gas emissions...

The costs of emission reduction policies, markets for emission rights: what can we learn from the models?

International Nuclear Information System (INIS)

Blanchard, O.

2001-01-01

Several models have been developed to assess the economic impacts of the commitments undertaken at Kyoto by the various parties to the Framework Agreement on Climatic Change. Following a seminar organised by the European Commission, the task here is to take stock of the various points of agreement or the differences made apparent by the models concerning the economic challenges relating to the Kyoto protocol. Qualitatively, the results are similar on several points: the implementation of the Kyoto protocol within the countries of appendix B represents a cost for these economies, except for those countries possessing hot air compared to an autarkic situation, the exchange of emission rights leads to a gain for each of the participants in the market but the setting of a ceiling for these exchanges brings about a reduction in global gains from exchange and strongly affects the division of these gains between countries. Finally, the recognition of families of greenhouse gas other than CO 2 reduces the costs of observing the Kyoto commitments. However, the quantitative results frequently diverge, both due to the type of model used (general or sector based balance) and the hypotheses chosen for the exogenous variables. It is therefore important to carry out awareness analyses, to propose sets of common hypotheses for certain exogenous variables and even to define a reference scenario common to all of the models in order to be able to re-examine the results, but this time on a common basis. The tasks of modelling should also be continued and enhanced in the following areas: What are the impacts of an emission rights market at a sector-based level (beginning with industry)? What is the exact effect of the inclusion of the six families of greenhouse gas and the absorption of carbon by the wells? Finally, what are the possibilities of differing objectives concerning a second round of commitments (post Kyoto)? (author)

Tendances Carbone no. 92. Carbon markets and the post-2020 Agreement

International Nuclear Information System (INIS)

Marcu, Andrei

2014-06-01

Among the publications of CDC Climat Research, 'Tendances Carbone' bulletin specifically studies the developments of the European market for CO 2 allowances. Beside some statistical figures about energy production/consumption and carbon markets, this issue specifically addresses the following points: - EU ETS reforms: on 25 June, the EU Commission will host a panel of experts to discuss technical aspects of the proposal of the Market Stability Reserve. - Market Stability Reserve of the EU ETS: Germany supports the Commission proposal of a market stability reserve and calls for a launch of the mechanism significantly before 2020, i.e. already in 2017. - 2030 energy and climate package: on 26 and 27 June, the EU Council will discuss the target of CO 2 emissions reduction of 40% by 2030 to take a final decision as soon as possible and later in October 2014

From climate change to emissions trading : a briefing

International Nuclear Information System (INIS)

Marcu, A.

2002-01-01

Global warming is caused by the presence of greenhouse gases (GHGs) in the earth's atmosphere. These gases include, carbon dioxide, nitrous oxides, sulphur dioxide and methane. GHGs trap heat between the earth's atmosphere and the earth's surface to cause an overall warming trend of the Earth. The United Nations Framework Convention on Climate Change was established to address the issue of climate change and to determine the anthropogenic impact on climate change. Evidence from ice cores suggest that global warming has occurred in the past. The current state of global warming was examined by comparing the climate of today with that of the past. It was determined that the current global warming trend surpasses that of any ever observed in the past. The Kyoto Protocol was adopted in 1997 as a policy set to address the need for the world to reduce GHG emissions into the atmosphere. The Kyoto Protocol puts forth 3 sets of mechanisms to help businesses reduce GHG emissions. Emissions trading is one of them: it is a financial flexibility mechanism that allows businesses that have emitted more than their allowed share of GHGs to buy allowances from business that have emitted fewer GHGs than they were allowed. Emissions trading does not create reductions, however, it identifies the most economical solution to reduce GHGs. TransAlta, Ontario Power Generation and Suncor have conducted a few transactions to see how the market will work. There will be a global register to keep track of all assigned allowances. The paper described government action in addressing the climate change issue with reference to actions in the United Kingdom, Netherlands, Denmark and Switzerland. Canada has initiated the Greenhouse Gas Emission Reduction Trading Pilot (GERT) to test the effectiveness of emission reduction trading for GHGs in the Canadian context. GERT is a partnership between the federal government, some provinces, industry, labour and environmental groups. Ontario has established a

Trading in the rain. Rainfall and European power sector emissions. Research note no. 9; Trading in the rain. Precipitations et emissions du secteur electrique europeen. Note d'etude n.9

Energy Technology Data Exchange (ETDEWEB)

NONE

2006-07-01

Analysts often say that temperature and rainfall have an impact on the price of CO{sub 2}, as they influence the conditions of electric power supply and demand. Rainfall mainly affects the capacity of hydropower production, the third largest source of electricity in Europe and by far the leading source of renewable energy. The variability of hydroelectric volumes is indeed usually offset by other, higher-emitting sources of electricity, which has repercussions on the European allowances trading market. In 2005, rainfall was unusually low in several European countries: in the Iberian peninsula and in France, drought is believed to have brought about a rise of approximately 15 Mt CO{sub 2} in power sector emissions. In contrast, hydrological conditions were particularly good in the Nordic countries, allowing them to reduce CO{sub 2} emissions in the region as a whole through hydropower-based exports. The additional allowances demand would therefore have been 'only' about 9 Mt CO{sub 2}. To make the interaction with the CO{sub 2} market easier to understand, an indicator of rainfall in Europe must include this compensating phenomenon resulting from the heterogeneity of the climatic conditions and volumes produced in Europe.

Deregulation of the Nordic power market and environmental policy

International Nuclear Information System (INIS)

Amundsen, E.S.; Nesse, A.; Tjoetta, S.

1999-01-01

A common Nordic power market will reduce total CO2 emissions in the Nordic countries as compared to a situation of autarky and, thus, reduce the aggregate cost of complying to strict national CO2 emission targets. A common market for CO2 emission permits may reduce the aggregate cost further, but this cost reduction will be smaller the harsher the CO2 emission constraints are. The economic gain of introducing a common Nordic power market will be particularly large in the case of a Swedish nuclear power phase out. In this case, the cost reduction of introducing a common market for CO2 emission permits will not be very large. 10 refs

Oligopolistic concurrence and investment: application to electricity markets

International Nuclear Information System (INIS)

Meunier, G.

2008-12-01

This research aims at analysing investment strategies of firms which are in an oligopolistic situation. After a brief description of the physical characteristics of an electric system, the author describes the reforms and defines the problematic of an investment in electricity production within markets in imperfect concurrence. In a first part, the author analyses the heterogeneity (either exogenous or endogenous) and technology choices of oligopolistic firms. In case of an exogenous heterogeneity, he studies the impact of the number of firms on investment decisions. In the second part, the author examines the regulations introduced in industries in imperfect concurrence: electricity production by a public firm and interaction between emission allowance market and investment

The Effect of Allowing Pollution Offsets with Imperfect Enforcement

OpenAIRE

Hilary Sigman; Howard F. Chang

2011-01-01

Public policies for pollution control, including climate change policies, sometimes allow polluters in one sector subject to an emissions cap to offset excessive emissions in that sector with pollution abatement in another sector. The government may often find it more costly to verify offset claims than to verify compliance with emissions caps. Concerns about such difficulties in enforcement may lead regulators to restrict the use of offsets. In this paper, we demonstrate that allowing offset...

Banking and back-loading emission permits

International Nuclear Information System (INIS)

Chaton, Corinne; Creti, Anna; Peluchon, Benoît

2015-01-01

In this article we focus on the so-called back-loading policy adopted by the European Commission to increase the carbon market price. This environmental measure consists of removing a share of the allowances allocated for a given period in order to reallocate some or all of them later on. To analyze the impact of the permits back-loading, we determine the CO 2 price equilibrium with and without the policy measure, considering not only the market for permits but also the output market of regulated sectors. We propose a two-period model, where the market for permits is perfectly competitive, and the output market can be either competitive or oligopolistic. First, we define the condition under which banking from one period to another is optimal. This condition, that is the absence of arbitrage opportunities (AOA), depends not only from the period initial allocation but also on production market fundamentals. When this condition is satisfied, the market for emission is shown intertemporally efficient. Second, we point out that the back-loading measure may create inefficiencies or leave unaffected the permits price, if it alters the AOA. -- Highlights: •Relationship between the market for permits and the output market of regulated sectors. •Analysis of CO 2 prices and banking. •Impact of a recent environmental policy measure (backloading) on CO 2 prices

German Energiewende and the heating market – Impact and limits of policy

International Nuclear Information System (INIS)

Bauermann, Klaas

2016-01-01

The German Energiewende envisages achieving a climate-neutral building stock in 2050 by means of two major pillars of regulation. First, residential buildings should consume 80% less primary energy and second; the remaining energy demand should be covered primarily with renewables. This paper simulates the future German heating market under different policy scenarios in order to evaluate the impact and limits of recent and conceivable policies. The investigation is based upon a dual model approach, linking a residential heating model to a discrete choice model. The major finding is that current regulations are not suitable for the achievement of governmental targets. Scenario calculations show that additional carbon emission reductions, triggered by the current regulatory regime, are falling short of expectations. In terms of economic efficiency, all calculated policy alternatives outperform the regulation currently in place. This allows to draw the conclusion that carbon emission reductions can be achieved without a major increase in cost. The model results highlight two policy implications. First, a rising mandatory share of renewables in the heating market is needed for target achievement and can be cost effectively. Second, renewable obligations for heating systems must include the existing building stock to achieve the postulated political targets. - Highlights: •The residential heating market accounts for major share of carbon emissions. •The disregard of the building stock weakens the impact of recent regulation. •Current regulation preserves a heating market dominated by fossil fuels. •A significant renewable share can be achieved through direct regulation. •Alternative policy leads to emission reductions without major increases in costs.

Carbon Emission Disclosure and the Cost of Capital: An Analysis of Malaysian Capital Market

Directory of Open Access Journals (Sweden)

Binti Abd Rahman Noor Raida

2017-01-01

Full Text Available The main purpose of this study is to examine the relationship between voluntary disclosure and cost of capital by exploring the impact of voluntary carbon emission disclosure (VCED on the firm’s weighted-average cost of capital. A carbon disclosure index is used to evaluate the quality of carbon emission disclosure in 2013 and 2014 annual reports of 247 Malaysian public listed companies. By using content analysis, the result highlights a significant increase in the level and quality of carbon emission disclosure practice from 2013 to 2014. In addition, the finding from regression analysis indicates insignificant relationship between VCED quality and weighted-average cost of capital. Overall, our findings suggest that the carbon emission disclosure is still low, as such, the quality of VCED do not have an impact on firm’s cost of capital. The results of the study allow the government to measure progress toward achieving its target to reduce carbon emission and will add weight to the call by accounting regulation body such as Malaysian Accounting Standard Board for a specific standard on carbon reporting.

Marketable permits for controlling sulphur dioxide emissions

International Nuclear Information System (INIS)

Hale, D.R.; Bjornstad, D.J.

1991-12-01

The purpose of this paper is to describe research sponsored by the Energy Information Administration (EIA) at the Oak Ridge National Laboratory (ORNL) into the nature of the auctions described in the bills. The research was undertaken at the request of the House Committee on Energy and Commerce to assess how various provisions in the bills might affect the workings of the market. Because the project called for the analysis of market mechanisms that do not now exist, a ''laboratory'' approach was applied in which artificial markets are created using computerized trading, volunteer subjects, and cash incentives to mimic the markets being studied. Dr. Mark Isaac, at the University of Arizona, and Dr. Jamie Kruse, at the University of Colorado, led teams that designed and conducted the laboratory experiments. 4 figs., 5 tabs

The Adaptation Law for emissions trading. Part 2. A level playing field for emissions trading?

International Nuclear Information System (INIS)

Simonetti, S.

2010-01-01

To supplement, clarify and simplify the regulations for emission trading, the Amendment Act emission trading II was submitted to the Dutch Lower Chamber end of 2009. This article discusses the pending bill and comments on a number of remarkable stipulations that may be important to the market parties. First a brief overview is provided of the basic principles of emission trading and the players in the CO2 market. [nl

Cross-border electricity market effects due to price caps in an emission trading system : An agent-based approach

NARCIS (Netherlands)

Richstein, J.C.; Chappin, E.J.L.; De Vries, L.J.

2014-01-01

The recent low CO2 prices in the European Union Emission Trading Scheme (EU ETS) have triggered a discussion whether the EU ETS needs to be adjusted. We study the effects of CO2 price floors and a price ceiling on the dynamic investment pathway of two interlinked electricity markets (loosely based

Trading in the rain. Rainfall and European power sector emissions. Research note no. 9; Trading in the rain. Precipitations et emissions du secteur electrique europeen. Note d'etude n.9

Energy Technology Data Exchange (ETDEWEB)

NONE

2006-07-01

Analysts often say that temperature and rainfall have an impact on the price of CO{sub 2}, as they influence the conditions of electric power supply and demand. Rainfall mainly affects the capacity of hydropower production, the third largest source of electricity in Europe and by far the leading source of renewable energy. The variability of hydroelectric volumes is indeed usually offset by other, higher-emitting sources of electricity, which has repercussions on the European allowances trading market. In 2005, rainfall was unusually low in several European countries: in the Iberian peninsula and in France, drought is believed to have brought about a rise of approximately 15 Mt CO{sub 2} in power sector emissions. In contrast, hydrological conditions were particularly good in the Nordic countries, allowing them to reduce CO{sub 2} emissions in the region as a whole through hydropower-based exports. The additional allowances demand would therefore have been 'only' about 9 Mt CO{sub 2}. To make the interaction with the CO{sub 2} market easier to understand, an indicator of rainfall in Europe must include this compensating phenomenon resulting from the heterogeneity of the climatic conditions and volumes produced in Europe.

Evaluating the EU ETS impacts on profits, investments and prices of the Italian electricity market

International Nuclear Information System (INIS)

Bonenti, Francesca; Oggioni, Giorgia; Allevi, Elisabetta; Marangoni, Giacomo

2013-01-01

Climate change is a global issue, but actions to mitigate its development are regional. Europe has taken the leadership in the carbon emission policy by introducing the Emissions Trading Scheme (EU ETS), formerly regulated by Directive 2003/87/EC and since 2013 by Directive 2009/29/EC. This new Directive imposes a full auctioning system for allocating CO 2 allowances to the power sector and encourages the use of renewable energy sources. We investigate the economic impacts of the EU ETS on the Italian electricity market using a power generation expansion model. We adopt a technological representation of the energy market that also accounts for power exchanges with foreign countries and we assume that generators operate in different zones connected by interconnections with limited capacity. We study both an oligopolistic and a perfectly competitive behavior of Italian generators and we compare the corresponding outcomes under different EU ETS scenarios. Our analysis shows that, in perfect competition, generators generally invest more than in an oligopolistic framework, but in both market configurations, investments in Italy are mainly concentrated in fossil-fired plants, especially in 2020. This happens also when incentives are given to renewables. The developed models are implemented as complementarity problems and solved in GAMS using the PATH solver. - Highlights: • We evaluate the EU-ETS impacts on the Italian electricity market. • We model different EU-ETS scenarios and energy market organizations. • Generators can invest in new capacity. • Investments in CCGT plants are preferable to those in clean technologies. • Profits depend on market organization and on ETS allowance allocation policies

NEUROMARKETING IN MARKET RESEARCH

Directory of Open Access Journals (Sweden)

Dijana Ćosić

2016-03-01

Full Text Available Neuromarketing is a fairly new discipline that combines behavioural psychology, economics and consumer neuroscience. With the help of different techniques, such as functional magnetic resonance, electroencephalography, positron emission tomography, eye tracker etc., it measures respondent’s reaction to different stimuli. It allows the researchers to gain insight into unconscious drivers of choice and preference which they would not be able to discover with traditional methods (focus groups, in depth interviews and questionnaires. In market research, most widely used neuromarketing technique is eye tracker. Me and my associates conducted a typical market research study of a TV commercial with a help of a stationary eye tracker and “Gazepoint” software. 21 respondents participated in the study. The study discovered that one scene in the commercial drew attention much more than the others. As neuromarketing raises ethical issues I reviewed the literature related to these issues and presented an overview of neuromarketing and neuromarketing techniques as well.

Cross-border electricity market effects due to price caps in an emission trading system: An agent-based approach

International Nuclear Information System (INIS)

Richstein, Jörn C.; Chappin, Emile J.L.; Vries, Laurens J. de

2014-01-01

The recent low CO 2 prices in the European Union Emission Trading Scheme (EU ETS) have triggered a discussion whether the EU ETS needs to be adjusted. We study the effects of CO 2 price floors and a price ceiling on the dynamic investment pathway of two interlinked electricity markets (loosely based on Great Britain, which already has introduced a price floor, and on Central Western Europe). Using an agent-based electricity market simulation with endogenous investment and a CO 2 market (including banking), we analyse the cross-border effects of national policies as well as system-wide policy options. A common, moderate CO 2 auction reserve price results in a more continuous decarbonisation pathway. This reduces CO 2 price volatility and the occurrence of carbon shortage price periods, as well as the average cost to consumers. A price ceiling can shield consumers from extreme price shocks. These price restrictions do not cause a large risk of an overall emissions overshoot in the long run. A national price floor lowers the cost to consumers in the other zone; the larger the zone with the price floor, the stronger the effect. Price floors that are too high lead to inefficiencies in investment choices and to higher consumer costs. - Highlights: • Cross-border effects of CO 2 policies were investigated with an agent-based model. • The current EU ETS might cause CO 2 price shocks and CO 2 price volatility. • A CO 2 auction reserve price does not lower welfare, but lowers CO 2 price volatility. • A national CO 2 price floor lowers consumer cost in the other countries. • A CO 2 price ceiling does not lead to an overshoot of emissions

Stochastic–multiobjective market equilibrium analysis of a demand response program in energy market under uncertainty

International Nuclear Information System (INIS)

Hu, Ming-Che; Lu, Su-Ying; Chen, Yen-Haw

2016-01-01

Highlights: • Analyze the impact of a demand response program under uncertainty. • Stochastic Nash–Cournot competition model is formulated. • Case study of the Taiwanese electric power market is conducted. • Demand response decreases power price, generation, and emissions. • Demand uncertainty increases energy price and supply risk in the results. - Abstract: In the electricity market, demand response programs are designed to shift peak demand and enhance system reliability. A demand response program can reduce peak energy demand, power transmission congestion, or high energy-price conditions by changing consumption patterns. The purpose of this research is to analyze the impact of a demand response program in the energy market, under demand uncertainty. A stochastic–multiobjective Nash–Cournot competition model is formulated to simulate demand response in an uncertain energy market. Then, Karush–Kuhn–Tucker optimality conditions and a linear complementarity problem are derived for the stochastic Nash–Cournot model. Accordingly, the linear complementarity problem is solved and its stochastic market equilibrium solution is determined by using a general algebraic modeling system. Additionally, the case of the Taiwanese electric power market is taken up here, and the results show that a demand response program is capable of reducing peak energy consumption, energy price, and carbon dioxide emissions. The results show that demand response program decreases electricity price by 2–10%, total electricity generation by 0.5–2%, and carbon dioxide emissions by 0.5–2.5% in the Taiwanese power market. In the simulation, demand uncertainty leads to an 2–7% increase in energy price and supply risk in the market. Additionally, tradeoffs between cost and carbon dioxide emissions are presented.

Emissions trading and the negotiation of pollution credits

Energy Technology Data Exchange (ETDEWEB)

Black A.J.

2000-07-01

A new market is emerging based on greenhouse gas emissions and the trading of pollution credits. While the structure of the primary market is being planned, many businesses are already positioning themselves in the nascent secondary market. This trend is based on corporate 'realpolitik' a recognition that tougher environmental regulation is inevitable. But the development of an emissions trading regime is lagging behind commercial reality. This article examines the state of play in the development of a market for carbon emissions trading.

Emissions Trading Resources

Science.gov (United States)

Learn about emissions trading programs, also known as cap and trade programs, which are market-based policy tools for protecting human health and the environment by controlling emissions from a group of sources.

Linking GHG Emission Trading Systems and Markets

Energy Technology Data Exchange (ETDEWEB)

NONE

2006-07-01

Several different types of links are possible between different GHG-mitigation systems. These include: Linking two or more emission trading schemes so that emissions trading can occur both within and between different schemes ('direct links'); and Linking emission trading systems to registries/mechanisms and systems that generate offsets from project based mechanisms or from direct purchases/transfers of AAUs ('indirect links').

Determining energy and climate market policy using multiobjective programs with equilibrium constraints

International Nuclear Information System (INIS)

Siddiqui, Sauleh; Christensen, Adam

2016-01-01

Energy and climate market policy is inherently multiobjective and multilevel, in that desired choices often conflict and are made at a higher level than influenced actors. Analyzing tradeoff between reducing emissions and keeping fuel prices low, while seeking compromise among producers, traders, and consumers is the crux of the policy problem. This paper aims to address this issue by combining multiobjective optimization problems, which allow the study of tradeoff between choices, with equilibrium problems that model the networks and players over which these policies are chosen, to produce a formulation called a Multiobjective Program with Equilibrium Constraints. We apply this formulation to the United States renewable fuel market to help understand why it has been so difficult in releasing the 2014 mandate for the RFS (Renewable Fuel Standard). The RFS ensures that a minimum volume of renewable fuel is included in transportation fuel sold in the United States. Determining the RFS volume requirements involves anticipating market reaction as well as balancing policy objectives. We provide policy alternatives to aid in setting these volume obligations that are applicable to a wide variety of climate and energy market settings and explain why the RFS is not an optimal policy for reducing emissions. - Highlights: • First time a MOPEC has been used to model energy markets and climate policy. • Method to endogenously determine energy policy along with associated tradeoff. • Computationally efficient algorithm for MOPECs and compare to methods. • Explain why the RFS is not an optimal policy for emission reduction.

Interactions between energy efficiency and emission trading under the 1990 Clean Air Act Amendments

International Nuclear Information System (INIS)

Hillsman, E.L.; Alvic, D.R.

1994-08-01

The 1990 Clean Air Act Amendments affect electric utilities in numerous ways. The feature that probably has received the greatest attention is the provision to let utilities trade emissions of sulfur dioxide (SO 2 ), while at the same time requiring them to reduce S0 2 emissions in 2000 by an aggregate 43%. The emission trading system was welcomed by many as a way of reducing the cost of reducing emissions, by providing greater flexibility than past approaches. This report examines some of the potential interactions between trading emissions and increasing end-use energy efficiency. The analysis focuses on emission trading in the second phase of the trading program, which begins in 2000. The aggregate effects, calculated by an emission compliance and trading model, turn out to be rather small. Aggressive improvement of end-use efficiency by all utilities might reduce allowance prices by $22/ton (1990 dollars), which is small compared to the reduction that has occurred in the estimates of future allowance prices and when compared to the roughly $400/ton price we estimate as a base case. However, the changes in the allowance market that result are large enough to affect some compliance decisions. If utilities in only a few states improve end-use efficiency aggressively, their actions may not have a large effect on the price of an allowance, but they could alter the demand for allowances and thereby the compliance decisions of utilities in other states. The analysis shows how improving electricity end-use efficiency in some states can cause smaller emission reductions in other states, relative to what would have happened without the improvements. Such a result, while not surprising given the theory behind the emission trading system, is upsetting to people who view emissions, environmental protection, and energy efficiency in moral rather than strictly economic terms

Trading in the rain. Rainfall and European power sector emissions. Research note no. 9

International Nuclear Information System (INIS)

2006-01-01

Analysts often say that temperature and rainfall have an impact on the price of CO 2 , as they influence the conditions of electric power supply and demand. Rainfall mainly affects the capacity of hydropower production, the third largest source of electricity in Europe and by far the leading source of renewable energy. The variability of hydroelectric volumes is indeed usually offset by other, higher-emitting sources of electricity, which has repercussions on the European allowances trading market. In 2005, rainfall was unusually low in several European countries: in the Iberian peninsula and in France, drought is believed to have brought about a rise of approximately 15 Mt CO 2 in power sector emissions. In contrast, hydrological conditions were particularly good in the Nordic countries, allowing them to reduce CO 2 emissions in the region as a whole through hydropower-based exports. The additional allowances demand would therefore have been 'only' about 9 Mt CO 2 . To make the interaction with the CO 2 market easier to understand, an indicator of rainfall in Europe must include this compensating phenomenon resulting from the heterogeneity of the climatic conditions and volumes produced in Europe

A forward-backward SDEs approach to pricing in carbon markets

CERN Document Server

Chassagneux, Jean-François; Muûls, Mirabelle

2017-01-01

In Mathematical Finance, the authors consider a mathematical model for the pricing of emissions permits. The model has particular applicability to the European Union Emissions Trading System (EU ETS) but could also be used to consider the modeling of other cap-and-trade schemes. As a response to the risk of Climate Change, carbon markets are currently being implemented in regions worldwide and already represent more than $30 billion. However, scientific, and particularly mathematical, studies of these carbon markets are needed in order to expose their advantages and shortcomings, as well as allow their most efficient implementation. This Brief reviews mathematical properties such as the existence and uniqueness of solutions for the pricing problem, stability of solutions and their behavior. These fit into the theory of fully coupled forward-backward stochastic differential equations (FBSDEs) with irregular coefficients. The authors present a numerical algorithm to compute the solution to these non-standard FB...

Self-organized global control of carbon emissions

Science.gov (United States)

Zhao, Zhenyuan; Fenn, Daniel J.; Hui, Pak Ming; Johnson, Neil F.

2010-09-01

There is much disagreement concerning how best to control global carbon emissions. We explore quantitatively how different control schemes affect the collective emission dynamics of a population of emitting entities. We uncover a complex trade-off which arises between average emissions (affecting the global climate), peak pollution levels (affecting citizens’ everyday health), industrial efficiency (affecting the nation’s economy), frequency of institutional intervention (affecting governmental costs), common information (affecting trading behavior) and market volatility (affecting financial stability). Our findings predict that a self-organized free-market approach at the level of a sector, state, country or continent can provide better control than a top-down regulated scheme in terms of market volatility and monthly pollution peaks. The control of volatility also has important implications for any future derivative carbon emissions market.

The efficiency and equity of marketable permits for CO2 emissions

International Nuclear Information System (INIS)

Rose, A.; Stevens, B.

1993-01-01

This paper examines the efficiency and equity implications of alternative assignments of marketable permits for carbon dioxide. A non-linear programming model is used to estimate the net welfare changes of permit allocations based on Sovereignty and Rawlsian equity criteria for 8 countries/regions covering the spectrum of economic development levels. The net welfare gains associated with an overall 20% reduction in CO 2 emissions are estimated to be nearly 20 billion dollars, an increase of several billion dollars over a system of inflexible emission quotas requiring 20% abatement in each country. Also, although the welfare changes implied by alternative permit assignments may vary greatly between countries before trading, the trading process significantly reduces the disparities. This result stems from the Coase Theorem, which implies a uniquely efficient outcome. That is, individual country abatement levels and, hence, costs, are the same under all permit assignments after trading, and net welfare for a given nation differs only by the amount of permit revenues/expenditures associated with the application of alternative equity criteria. Foremost among the paper's policy implications is that although equity criteria may differ significantly in principle, their welfare implications in practice may be very similar for various subsets of these criteria. This should reduce tensions at the bargaining table and facilitate the negotiation of greenhouse gas agreements. 52 refs., 3 figs., 8 tabs

A game theoretic model of the Northwestern European electricity market-market power and the environment

International Nuclear Information System (INIS)

Lise, Wietze; Linderhof, Vincent; Kuik, Onno; Kemfert, Claudia; Ostling, Robert; Heinzow, Thomas

2006-01-01

This paper develops a static computational game theoretic model. Illustrative results for the liberalising European electricity market are given to demonstrate the type of economic and environmental results that can be generated with the model. The model is empirically calibrated to eight Northwestern European countries, namely Belgium, Denmark, Finland, France, Germany, The Netherlands, Norway, and Sweden. Different market structures are compared, depending on the ability of firms to exercise market power, ranging from perfect competition without market power to strategic competition where large firms exercise market power. In addition, a market power reduction policy is studied where the near-monopolies in France and Belgium are demerged into smaller firms. To analyse environmental impacts, a fixed greenhouse gas emission reduction target is introduced under different market structures. The results indicate that the effects of liberalisation depend on the resulting market structure, but that a reduction in market power of large producers may be beneficial for both the consumer (i.e. lower prices) and the environment (i.e. lower greenhouse gas permit price and lower acidifying and smog emissions)

RELATIONSHIP DERIVATIVES FINANCIAL MARKETS, MONEY AND STOCK MARKETS AS A SUBSYSTEM OF FINANCIAL MARKET

Directory of Open Access Journals (Sweden)

Yulia Yelnikova

2016-11-01

Full Text Available Under conditions of intensive strengthening of globalization of world financial markets and deepening of the crisis, the main source of which are financial markets, financial derivatives market is rapidly developing. In such circumstances, we observe very active growing demand for tools, the main purpose of which is to reduce the financial risk – derivatives. Outlined trend has also involved Ukraine. In this connection, there is an objective need to develop estimate the interconnection of the money and stock markets and derivatives market. It should be kept in mind that achieving the outlined goal is possible only under condition of the full understanding of the scientific and methodological principles of the development of these markets. Purpose is to estimate the interconnection of the money and stock markets and derivatives market by building a mathematical model of system of structural equations that will promote the compilation of scientifically based program of derivatives market. Methodology. By using methods of economic-mathematical modelling were estimated the degree of influence of studied markets factors on financial derivatives market development and by changing this or that factor were predicted future trends of its operations. Results of the survey showed the current state and problems of derivatives market functioning. At the same time, our study allowed us to talk, that factors of the money and stock markets have a different impact on the derivatives market. So, the majority of money market factors have a reverse influence on the development of derivatives market. Instead, the stock market has a direct influence. Practical implications. The proposed scientific and methodical approach to evaluating the impact of factors on the derivatives market allows: influenced by different factors; to conduct a qualitative interpretation of the quantitative changes in the level of market development; to form a complete system of state

Environmental benefits of distributed generation with and without emissions trading

International Nuclear Information System (INIS)

Tsikalakis, A.G.; Hatziargyriou, N.D.

2007-01-01

The need for improving energy efficiency and reducing CO 2 emissions and other pollutants, as well as the restructuring of energy markets has favoured the increase of distributed energy resources (DER). The co-ordinated control of these sources comprising renewable energy sources (RES) and distributed generators (DG) characterised by higher efficiencies and lower emissions compared to central thermal generation, when based on coal or oil provide several environmental benefits. These benefits can be quantified based on DER participation in the CO 2 emission trading market. This paper provides a method to calculate emissions savings achieved by the marginal operation of DER in liberalised market conditions using available emissions data. The participation of DER in emissions trading markets is also studied, with respect to profits, pollutants decrease and change in operating schedules. It is shown that the operation of DER can significantly reduce pollutants, provided sufficient remuneration from CO 2 emission trading market participation is provided. Moreover, it is shown that using average emissions values to calculate the environmental benefits of DER might provide misleading results. (author)

The value relevance of environmental emissions

Directory of Open Access Journals (Sweden)

Melinda Lydia Nelwan

2016-07-01

Full Text Available This study examines whether environmental performance has value relevance by investigating the relations between environmental emissions and stock prices for the U.S. public companies. The previous studies argued that the conjectured relations between accounting performance measures and environmental performance do not have a strong theoretical basis, and the modeling of relations between market per-formance measures and environmental performance do not adequately consider the relevance of accounting performance to market value. Therefore, this study examines whether publicly reported environmental emissions provide incremental information to accounting earnings in pricing companies stocks. It is done among the complete set of industries covered by Toxics Release Inventory (TRI reporting for the period 2007 to 2010. Using Ohlson model but modified to include different types of emis-sions, it is found that ground emissions (underground injection and land emissions are value relevant but other emission types (air and water and transferred-out emis-sions appear to not provide incremental information in the valuation model. The result in this study raise concerns that different types of emissions are assessed differently by the market, confirming that studies should not aggregate such measures.

The impact of power market structure on the pass-through of CO2 emissions trading costs to electricity prices. A theoretical approach

International Nuclear Information System (INIS)

Sijm, J.; Chen, Yihsu; Hobbs, B.F.

2009-06-01

This paper analyses the impact of power market structure on the pass-through rate (PTR) of CO2 emissions trading costs on electricity prices from a theoretical point of view, including graphical illustrations and mathematical proofs. Market structure refers in particular to the number of firms active in the market as well as to the shape of the power demand and supply curves. In addition, it analyses the impact of other power market related factors on the PTR of carbon costs to electricity prices, notably the impact of ET-induced changes in the merit order of power generation technologies or the impact of pursuing other market strategies besides maximising generators' profits, such as maximising market shares or sales revenues of power companies. It shows that each of these factors can have a significant impact on the rate of passing-through carbon costs to electricity prices

The impact of power market structure on the pass-through of CO2 emissions trading costs to electricity prices. A theoretical approach

Energy Technology Data Exchange (ETDEWEB)

Sijm, J. [ECN Policy Studies, Petten (Netherlands); Chen, Yihsu [Merced School of Engineering, University of California, Merced, CA (United States); Hobbs, B.F. [Department of Geography and Environmental Engineering, Johns Hopkins University, Baltimore, Maryland (United States)

2009-06-15

This paper analyses the impact of power market structure on the pass-through rate (PTR) of CO2 emissions trading costs on electricity prices from a theoretical point of view, including graphical illustrations and mathematical proofs. Market structure refers in particular to the number of firms active in the market as well as to the shape of the power demand and supply curves. In addition, it analyses the impact of other power market related factors on the PTR of carbon costs to electricity prices, notably the impact of ET-induced changes in the merit order of power generation technologies or the impact of pursuing other market strategies besides maximising generators' profits, such as maximising market shares or sales revenues of power companies. It shows that each of these factors can have a significant impact on the rate of passing-through carbon costs to electricity prices.

Analysis of the CO2 emissions and of the other characteristics of the European market of new passenger cars. Part 1. Analysis of general data and analysis per country

International Nuclear Information System (INIS)

Zervas, Efthimios

2010-01-01

Exhaust CO 2 emitted from passenger cars is one of the major greenhouse effect gases. Several parameters influence the exhaust CO 2 emissions of each passenger car: its characteristics (fuel used, vehicle weight,..) and its use (annual mileage, driving conditions,..). CO 2 emissions from passenger cars decrease during last years; however, this decrease seems to reach its limits. Several parameters of the EU15 new PCs market, such as new passenger cars registrations, type of fuel used, engine capacity, max. power, max. specific power, segment distribution, vehicle weight and their CO 2 emissions on the New European Driving Cycle are analyzed here. The target is to find the real market parameters influencing exhaust CO 2 emissions. Because of the many data used and the parameters examined, this first part of the work is focused on the average values of each parameter studied and the values of each country, while the second part is based on the analysis of each PC segment and the third one on the analysis of the major brands presented in the European market. (author)

MEMS device for mass market gas and chemical sensors

Science.gov (United States)

Kinkade, Brian R.; Daly, James T.; Johnson, Edward A.

2000-08-01

Gas and chemical sensors are used in many applications. Industrial health and safety monitors allow companies to meet OSHA requirements by detecting harmful levels of toxic or combustible gases. Vehicle emissions are tested during annual inspections. Blood alcohol breathalizers are used by law enforcement. Refrigerant leak detection ensures that the Earth's ozone layer is not being compromised. Industrial combustion emissions are also monitored to minimize pollution. Heating and ventilation systems watch for high levels of carbon dioxide (CO2) to trigger an increase in fresh air exchange. Carbon monoxide detectors are used in homes to prevent poisoning from poor combustion ventilation. Anesthesia gases are monitored during a patients operation. The current economic reality is that two groups of gas sensor technologies are competing in two distinct existing market segments - affordable (less reliable) chemical reaction sensors for consumer markets and reliable (expensive) infrared (IR) spectroscopic sensors for industrial, laboratory, and medical instrumentation markets. Presently high volume mass-market applications are limited to CO detectros and on-board automotive emissions sensors. Due to reliability problems with electrochemical sensor-based CO detectors there is a hesitancy to apply these sensors in other high volume applications. Applications such as: natural gas leak detection, non-invasive blood glucose monitoring, home indoor air quality, personal/portable air quality monitors, home fire/burnt cooking detector, and home food spoilage detectors need a sensor that is a small, efficient, accurate, sensitive, reliable, and inexpensive. Connecting an array of these next generation gas sensors to wireless networks that are starting to proliferate today creates many other applications. Asthmatics could preview the air quality of their destinations as they venture out into the day. HVAC systems could determine if fresh air intake was actually better than the air

Emissions trading and firms' strategies. The case of power producers

International Nuclear Information System (INIS)

Rousse, O.

2005-11-01

This thesis deals with the impacts of a domestic emissions trading scheme on firms' strategies. As recent experiences of such programs (Acid Rain Program, RECLAIM Program, NOx Budget Program and the European Union Emissions Trading Scheme) concern mainly heat and power producers, we analyze especially strategies of these companies. In context of electricity market deregulation, our study takes two directions: uncertainty and competitive distortions. Concerning uncertainty, we are interested in portfolio management of emission permits, that is choice under uncertainty between buying, selling and banking permits. Concerning competitive distortions, we consider manipulations on the permits and/or products markets. Among others, we investigate interactions between a pollution market and the wholesale electricity market. From a general point of view, we show that a permits market, even competitive, gives to power producers more opportunities to act strategically on wholesale electricity markets. By this way, our study attempts to indicate when these market distortions are more likely to occur and to give some emissions market design instructions. (author)

Can a unilateral carbon tax reduce emissions elsewhere?

Energy Technology Data Exchange (ETDEWEB)

Elliott, Joshua [Chicago Univ., IL (United States); Fullerton, Don [Illinois Univ., Champaign, IL (United States)

2013-02-15

One country that tries to reduce greenhouse gas emissions may fear that other countries get a competitive advantage and increase emissions (''leakage''). Estimates from computable general equilibrium (CGE) models such as Elliott et al (2010a,b) indicate that 15% to 25% of abatement might be offset by leakage. Yet the Fullerton et al (2012) analytical general equilibrium model shows an offsetting term with negative leakage. To derive analytical expressions, their model is quite simple, with only one good from each country or sector, a fixed stock of capital, competitive markets, and many identical consumers that purchase both goods. Their model is not intended to be realistic, but only to demonstrate the potential for negative leakage. Most CGE models do not allow for negative leakage. In this paper, we use a full CGE model with many countries and many goods to measure effects in a way that allows for negative leakage. We vary elasticities of substitution and confirm the analytical model's prediction that negative leakage depends on the ability of consumers to substitute into the untaxed good and the ability of firms to substitute from carbon emissions into labor or capital.

Electric Vehicle Market Penetration and Impacts on Energy Consumption and CO2 Emission in the Future: Beijing Case

Directory of Open Access Journals (Sweden)

Qian Zhang

2017-02-01

Full Text Available This study focuses on the development of electric vehicles (EV in the private passenger vehicle fleet in Beijing (China, analyzes how EVs will penetrate in the market, and estimates the resulting impacts on energy consumption and CO2 emissions up to 2030. A discrete choice model is adopted with consideration of variables including vehicle technical characteristics, fuel prices, charging conditions and support policies. Results show that by 2030, without technological breakthrough and support policies, the market share of EV will be less than 7%, with gasoline dominating the energy structure. With fast technological progress, charging facility establishment, subsidies and tax breaks, EVs will account for 70% of annual new vehicle sales and nearly half of the vehicle stock by 2030, resulting in the substitution of nearly 1 million tons of gasoline with 3.2 billion kWh electricity in 2030 and the reduction of 0.6 million tons of CO2 emission in 2030. Technological progress, charging conditions and fuel prices are the top three drivers. Subsidies play an important role in the early stage, while tax and supply-side policies can be good options as long-term incentives.

BP's emissions trading system

International Nuclear Information System (INIS)

Victor, David G.; House, Joshua C.

2006-01-01

Between 1998 and 2001, BP reduced its emissions of greenhouse gases by more than 10%. BP's success in cutting emissions is often equated with its use of an apparently market-based emissions trading program. However no independent study has ever examined the rules and operation of BP's system and the incentives acting on managers to reduce emissions. We use interviews with key managers and with traders in several critical business units to explore the bound of BP's success with emissions trading. No money actually changed hands when permits were traded, and the main effect of the program was to create awareness of money-saving emission controls rather than strong price incentives. We show that the trading system did not operate like a 'textbook' cap and trade scheme. Rather, the BP system operated much like a 'safety valve' trading system, where managers let the market function until the cost of doing so surpassed what the company was willing to tolerate

Emission analysis of the best available wood-fired central heating boilers on the market

International Nuclear Information System (INIS)

Axell, M.; Gustavsson, Lennart; Persson, Henrik; Leckner, B.

1998-01-01

The purpose of the present project is to study the emissions from some of the best available wood-fired central heating boilers on the market. The aim is to identify the critical factors which determine the emission levels by means of emission measurements as well as temperature measurements in the combustion chamber. Four boilers with different design characteristics have been included in the project. All boilers use reversed combustion and fan-assisted combustion air supply, and have shown low tar emissions in earlier environmental tests. Boiler A is a boiler with a rather large mass of ceramics in the grate and in the burn-out zone, and a large volume of water. Boiler B has a smaller mass in the cast-iron grate and in the burn-out zone and a small water volume. Boiler C is a boiler with tertiary air and an incorporated accumulator tank. Boiler D has a zirconia-cell probe for continuous control of the air-excess ratio. The measurements have been made with the boilers in accumulator operation, i.e. at maximum heat output, since they are intended for this type of operation. Tests have, in addition to normal operating conditions, been made with high fuel moisture contents, high draught and a low boiler temperature at the start of the test. Measurements have been made of excess-air ratios, contents of CO, total hydrocarbons (THC), NO x and a number of volatile organic compounds (VOC) in the flue gases as well as of combustion temperatures below the grate

Building Trust in Emissions Reporting. Global Trends in Emissions Trading Schemes

Energy Technology Data Exchange (ETDEWEB)

Kruijd, J.; Walrecht, A.; Laseur, J.; Schoolderman, H.; Gledhill, R.

2007-02-15

This report highlights the key characteristics of the world's main emission trading schemes, presents a new vision for compliance in emissions trading and calls for global action to develop this. Climate change is now at the top of the political and business agenda. Al Gore's 'An Inconvenient Truth', the Stern Review and the now almost daily press coverage of climate change science and impacts have engaged many of the global leaders in government and in business. Emissions trading is increasingly seen as a central plank in the response to climate change. But market mechanisms like this depend on trust and confidence. Any widespread or systemic failure, as a result of deficient monitoring and reporting, flawed compliance processes or fraud, could undermine confidence in markets and regulation and jeopardise the crucial policy goals that they are designed to address. Key to this trust are the three central criteria of transparency, accountability and integrity. The PricewaterhouseCoopers report looks at how the patchwork of trading schemes that are emerging around the globe stacks up against these criteria. Despite good intentions across the board, the general picture is one of new and immature markets, inconsistent and complex compliance frameworks and risk. PricewaterhouseCoopers make the case for urgent and coordinated action to develop a framework of generally accepted principles and practice that will underpin trust and efficiency in these new markets - in effect, a new Global Emissions Compliance Language.

Building Trust in Emissions Reporting. Global Trends in Emissions Trading Schemes

International Nuclear Information System (INIS)

Kruijd, J.; Walrecht, A.; Laseur, J.; Schoolderman, H.; Gledhill, R.

2007-02-01

This report highlights the key characteristics of the world's main emission trading schemes, presents a new vision for compliance in emissions trading and calls for global action to develop this. Climate change is now at the top of the political and business agenda. Al Gore's 'An Inconvenient Truth', the Stern Review and the now almost daily press coverage of climate change science and impacts have engaged many of the global leaders in government and in business. Emissions trading is increasingly seen as a central plank in the response to climate change. But market mechanisms like this depend on trust and confidence. Any widespread or systemic failure, as a result of deficient monitoring and reporting, flawed compliance processes or fraud, could undermine confidence in markets and regulation and jeopardise the crucial policy goals that they are designed to address. Key to this trust are the three central criteria of transparency, accountability and integrity. The PricewaterhouseCoopers report looks at how the patchwork of trading schemes that are emerging around the globe stacks up against these criteria. Despite good intentions across the board, the general picture is one of new and immature markets, inconsistent and complex compliance frameworks and risk. PricewaterhouseCoopers make the case for urgent and coordinated action to develop a framework of generally accepted principles and practice that will underpin trust and efficiency in these new markets - in effect, a new Global Emissions Compliance Language

Aspects related to 'emission trading'

International Nuclear Information System (INIS)

Tutuianu, Ovidiu

1999-01-01

The paper presents the aspects of international GHG (greenhouse gases) emission trading, such as: quality of GHG emission data, possible partners, monitoring activity, market mechanisms and difficulties. The following conclusions are drown: - debates on international trade with GHG emissions are currently in a very early stage; - actions are possible and feasible, particularly after Kyoto Conference, as versatile mechanism (besides the Joint Implementation Projects) which have in view the lowering of the global emission costs in different zones of the planet; - difficulties concerning monitoring, reporting and verification, practically preclude implementing a system of emission trading covering all the GHG, all the sources and reservoirs; - an international viable system of emission trading could initiate with a limited number of participants and consideration of only emission categories easy to be confined and surveyed; - existence of a national market and corresponding institutions for monitoring which could booster an international system development

Ratemaking and accounting for allowances and compliance costs

International Nuclear Information System (INIS)

Anon.

1992-01-01

The regulatory treatment of compliance costs and allowances will significantly affect both the utility's CAAA compliance decisions and the cost of compliance. Sections in this chapter include ratemaking treatment of allowances, utility buy-ins, the market test of compliance costs and utility incentive, FERC account classification, measuring the value of allowances, inventory methods for allowances, expense recognition of allowances, regulatory-created assets and liabilities, and application of the FERC proposal. 8 refs., 1 tab

Sulfur dioxide allowances. Trading and technological progress

International Nuclear Information System (INIS)

Kumar, Surender; Managi, Shunsuke

2010-01-01

The US Clean Air Act Amendments introduce an emissions trading system to regulate SO 2 emissions. This study finds that changes in SO 2 emissions prices are related to innovations induced by these amendments. We find that electricity-generating plants are able to increase electricity output and reduce emissions of SO 2 and NO x from 1995 to 2007 due to the introduction of the allowance trading system. However, compared to the approximate 8% per year of exogenous technological progress, the induced effect is relatively small, and the contribution of the induced effect to overall technological progress is about 1-2%. (author)

Practical guidebook about the market of CO{sub 2} emission quotas; Guide pratique du marche des quotas d'emission de CO{sub 2}

Energy Technology Data Exchange (ETDEWEB)

NONE

2005-07-01

Since January 1, 2005, the European directive about the trading of CO{sub 2} emission quotas foresees the allocation of CO{sub 2} emission quotas to the industrial sectors that generate huge amounts of greenhouse gases (energy generation, cement, glass, steel-making, mineral and paper industries). A system of trading of CO{sub 2} quotas has been implemented and allows the companies to exchange, sale or purchase quotas in order to be conformable with the volume of CO{sub 2} they have been authorized to release in the atmosphere. This guidebook is a vade mecum of the management of emission quotas. It explains the actions of the international community in favor of the fight against greenhouse emissions, the 3 flexibility mechanisms, the French environmental policy, the European system of fight against climatic change, the CO{sub 2} quotas system and its practical implementation. (J.S.)

The Importance of Marketing Segmentation

Science.gov (United States)

Martin, Gillian

2011-01-01

The rationale behind marketing segmentation is to allow businesses to focus on their consumers' behaviors and purchasing patterns. If done effectively, marketing segmentation allows an organization to achieve its highest return on investment (ROI) in turn for its marketing and sales expenses. If an organization markets its products or services to…

Typical calculation and analysis of carbon emissions in thermal power plants

Science.gov (United States)

Gai, Zhi-jie; Zhao, Jian-gang; Zhang, Gang

2018-03-01

On December 19, 2017, the national development and reform commission issued the national carbon emissions trading market construction plan (power generation industry), which officially launched the construction process of the carbon emissions trading market. The plan promotes a phased advance in carbon market construction, taking the power industry with a large carbon footprint as a breakthrough, so it is extremely urgent for power generation plants to master their carbon emissions. Taking a coal power plant as an example, the paper introduces the calculation process of carbon emissions, and comes to the fuel activity level, fuel emissions factor and carbon emissions data of the power plant. Power plants can master their carbon emissions according to this paper, increase knowledge in the field of carbon reserves, and make the plant be familiar with calculation method based on the power industry carbon emissions data, which can help power plants positioning accurately in the upcoming carbon emissions trading market.

What Is Emissions Trading?

Science.gov (United States)

Learn the basics about how emissions trading uses a market-based policy tool used to control large amounts of pollution emissions from a group of sources in order to protect human health and the environment.

Environment and economic risk: An analysis of carbon emission market and portfolio management.

Science.gov (United States)

Luo, Cuicui; Wu, Desheng

2016-08-01

Climate change has been one of the biggest and most controversial environmental issues of our times. It affects the global economy, environment and human health. Many researchers find that carbon dioxide (CO2) has contributed the most to climate change between 1750 and 2005. In this study, the orthogonal GARCH (OGARCH) model is applied to examine the time-varying correlations in European CO2 allowance, crude oil and stock markets in US, Europe and China during the Protocol's first commitment period. The results show that the correlations between EUA carbon spot price and the equity markets are higher and more volatile in US and Europe than in China. Then the optimal portfolios consisting these five time series are selected by Mean-Variance and Mean-CVAR models. It shows that the optimal portfolio selected by MV-OGARCH model has the best performance. Copyright © 2016 Elsevier Inc. All rights reserved.

Intelligent emissions controller for substance injection in the post-primary combustion zone of fossil-fired boilers

Science.gov (United States)

Reifman, Jaques; Feldman, Earl E.; Wei, Thomas Y. C.; Glickert, Roger W.

2003-01-01

The control of emissions from fossil-fired boilers wherein an injection of substances above the primary combustion zone employs multi-layer feedforward artificial neural networks for modeling static nonlinear relationships between the distribution of injected substances into the upper region of the furnace and the emissions exiting the furnace. Multivariable nonlinear constrained optimization algorithms use the mathematical expressions from the artificial neural networks to provide the optimal substance distribution that minimizes emission levels for a given total substance injection rate. Based upon the optimal operating conditions from the optimization algorithms, the incremental substance cost per unit of emissions reduction, and the open-market price per unit of emissions reduction, the intelligent emissions controller allows for the determination of whether it is more cost-effective to achieve additional increments in emission reduction through the injection of additional substance or through the purchase of emission credits on the open market. This is of particular interest to fossil-fired electrical power plant operators. The intelligent emission controller is particularly adapted for determining the economical control of such pollutants as oxides of nitrogen (NO.sub.x) and carbon monoxide (CO) emitted by fossil-fired boilers by the selective introduction of multiple inputs of substances (such as natural gas, ammonia, oil, water-oil emulsion, coal-water slurry and/or urea, and combinations of these substances) above the primary combustion zone of fossil-fired boilers.

Permafrost thaw strongly reduces allowable CO2 emissions for 1.5°C and 2°C

Science.gov (United States)

Kechiar, M.; Gasser, T.; Kleinen, T.; Ciais, P.; Huang, Y.; Burke, E.; Obersteiner, M.

2017-12-01

We quantify how the inclusion of carbon emission from permafrost thaw impacts the budgets of allowable anthropogenic CO2 emissions. We use the compact Earth system model OSCAR v2.2 which we expand with a permafrost module calibrated to emulate the behavior of the complex models JSBACH, ORCHIDEE and JULES. When using the "exceedance" method and with permafrost thaw turned off, we find budgets very close to the CMIP5 models' estimates reported by IPCC. With permafrost thaw turned on, the total budgets are reduced by 3-4%. This corresponds to a 33-45% reduction of the remaining budget for 1.5°C, and a 9-13% reduction for 2°C. When using the "avoidance" method, however, permafrost thaw reduces the total budget by 3-7%, which corresponds to reductions by 33-56% and 56-79% of the remaining budget for 1.5°C and 2°C, respectively. The avoidance method relies on many scenarios that actually peak below the target whereas the exceedance method overlooks the carbon emitted by thawed permafrost after the temperature target is reached, which explains the difference. If we use only the subset of scenarios in which there is no net negative emissions, the permafrost-induced reduction in total budgets rises to 6-15%. Permafrost thaw therefore makes the emission budgets strongly path-dependent. We also estimate budgets of needed carbon capture in scenarios overshooting the temperature targets. Permafrost thaw strongly increases these capture budgets: in the case of a 1.5°C target overshot by 0.5°C, which is in line with the Paris agreement, about 30% more carbon must be captured. Our conclusions are threefold. First, inclusion of permafrost thaw systematically reduces the emission budgets, and very strongly so if the temperature target is overshot. Second, the exceedance method, that is the only one that complex models can follow, only partially accounts for the effect of slow non-linear processes such as permafrost thaw, leading to overestimated budgets. Third, the newfound

Legal frameworks for emissions trading in the European Union

Energy Technology Data Exchange (ETDEWEB)

Maeaettae, K.; Anttonen, K. (Univ. of Joensuu (Finland)). Email: kalle.maatta@joensuu.fi; Upston-Hooper, K. (GreenStream Networks, Helsinki (Finland)); Mehling, M. (Univ. of Greifswald (Germany)); Perrels, A. (Government Institute for Economic Research VATT, Helsinki (Finland)), email: adriaan.perrels@vatt.fi

2009-07-01

The project is based on a comparative and pragmatic review of the legal frameworks for implementing the EU Emission Trading Scheme (ETS) in four EU jurisdictions (Finland, Sweden, United Kingdom and Germany). The project does not seek to examine the rationale of utilizing tradable mechanisms nor assess the costs and benefits of doing so. Its primary focus is to undertake a detailed study of the legal realities involved in implementing the EU ETS, particularly those issues of commercial importance such as taxation and accounting rules. The methodology adopted has been to formulate a comprehensive questionnaire (of approximately 70 questions) to be used as the basis of national reports together with a stand alone analysis by VATT, and in turn use the national reports and VATT study as the building blocks of a comparative overview report. The questionnaire seeks to highlight those significant legal and regulatory issues that impact on the establishment of emission allowance trading arrangements within the respective jurisdictions. The comparative analysis of these issues will focus on 'golden threads' of similarity and difference that impact on the establishment of an internal market within the European Union for the trading of emissions allowances. (orig.)

Legal frameworks for emissions trading in the European Union

International Nuclear Information System (INIS)

Upston-Hooper, K.; Perrells, A.; Anttonen, K.; Mehling, M.

2007-01-01

The Project is based on a comparative and pragmatic review of the legal frameworks for implementing the EU Emission Trading Scheme (ETS) in four EU jurisdictions (Finland, Sweden, United Kingdom and Germany). The Project does not seek to examine the rationale of utilizing tradable mechanisms nor assess the costs and benefits of doing so. Its primary focus is to undertake a detailed study of the legal realities involved in implementing the EU ETS, particularly those issues of commercial importance such as taxation and accounting rules. The methodology adopted has been to formulate a comprehensive questionnaire (of approximately 70 questions) to be used as the basis of national reports together with a stand alone analysis by VATT, and in turn use the national reports and VATT study as the building blocks of a comparative overview report. The questionnaire seeks to highlight those significant legal and regulatory issues that impact on the establishment of emission allowance trading arrangements within the respective jurisdictions. The comparative analysis of these issues will focus on 'golden threads' of similarity and difference that impact on the establishment of an internal market within the European Union for the trading of emissions allowances. (orig.)

Emission projections 2008-2012 versus national allocation plans II

International Nuclear Information System (INIS)

Neuhoff, Karsten; Ferrario, Federico; Grubb, Michael; Gabel, Etienne; Keats, Kim

2006-01-01

We compare the national allocation plans (NAPs), proposed and submitted by EU Member States as of October 2006, with our estimations for CO 2 emissions by the installations covered by these NAPs. The collective allocations proposed under phase II NAPs exceed the historic trend of emissions extrapolated forward. Using our projections we find, depending on uncertainty in fuel prices, economic growth rates, performance of the non-power sector and CDM/JI availability, a 15% chance of a 'dead market' with emissions below cap even at zero prices. With an expected inflow of committed CDM/JI credits of 100 MtCO 2 /year, allowance supply will exceed demand in 50% of cases without any carbon price, and in 80% of our euros20/tCO 2 scenarios. Banking of allowances towards post-2012 conditions could create additional demand, but this is difficult to anticipate and conditional on policy evolution. The proposed phase II NAPs would result in low prices and only small volumes of CDM/JI would enter the EU ETS. CDM/JI would almost exclusively be public-sector funded, placing the cost of Kyoto compliance entirely upon governments. (Author)

Energy and commodities market

International Nuclear Information System (INIS)

Bokermann, Marcus; Prass, Markus

2015-01-01

The electricity markets in Central and Western Europe and in the nordic countries have further shown weak in 2014 with falling prices. The key factors were the declining quotations for coal and natural gas and the warm weather. Another driver was the growth of renewable energy. In the power markets conditions remained mostly an oversupply. The upward trending prices on the CO 2 emissions market were not formative enough to turn the market sentiment. They only caused for volatility during the year. [de

Transportation and Greenhouse Gas Emissions Trading. Final Technical Report

Energy Technology Data Exchange (ETDEWEB)

Steve Winkelman; Tim Hargrave; Christine Vanderlan

1999-10-01

-specific policies, they recommend (in addition to the land use policies mentioned above), that they combine an upstream trading system with a carbon efficiency standard similar to the current CAFE standard. Under this approach a fuel price signal would be complemented by incentives for manufacturers to produce more carbon efficient vehicles. To prevent vehicle manufacturers from being forced to pay more than other sectors for reducing GHG emissions, they recommend that the vehicle makers be allowed to pay a cash penalty equal to the market price of allowances in lieu of meeting carbon efficiency requirements.

The energy price equivalence of carbon taxes and emissions trading—Theory and evidence

International Nuclear Information System (INIS)

Chiu, Fan-Ping; Kuo, Hsiao-I.; Chen, Chi-Chung; Hsu, Chia-Sheng

2015-01-01

Highlights: • The price equivalence of carbon taxes and emissions trading from theoretical and empirical models are developed. • The theoretical findings show that the price effects of these two schemes depend on the market structures. • Energy prices under a carbon tax is lower than an issions trading in an imperfectly competitive market. • A case study from Taiwan gasoline market is applied here. - Abstract: The main purpose of this study is to estimate the energy price equivalence of carbon taxes and emissions trading in an energy market. To this end, both the carbon tax and emissions trading systems are designed in the theoretical model, while alternative market structures are taken into consideration. The theoretical findings show that the economic effects of these two schemes on energy prices depend on the market structures. Energy prices are equivalent between these two schemes given the same amount of greenhouse gas emissions (GHGE) reduction when the market structure is characterized by perfect competition. However, energy prices will be lower when a carbon tax is introduced than when emissions trading is implemented in an imperfectly competitive market, which implies that the price effects of a carbon tax and emissions trading depend on the energy market structure. Such a theoretical basis is applied to the market for gasoline in Taiwan. The empirical results indicate that the gasoline prices under a carbon tax are lower than under emissions trading. This implies that the structure of the energy market needs to be examined when a country seeks to reduce its GHGE through the implementation of either a carbon tax or emissions trading.

Taking climate to the market

International Nuclear Information System (INIS)

Boyle, S.

1998-01-01

Since the 1997 Kyoto Protocol set binding targets for greenhouse gas reductions, there has been a rapid increase in interest in emissions trading. This is based on the premise that reduction options may be cheaper in countries such as those of eastern Europe and the developing world, than in others such as the USA and Norway. As long as real emission reductions take place, and given that climate change is a global problem, setting up an emissions trading market should provide a much cheaper option than reductions applied solely at a national level. The real prospects for a viable market, what it will look like, and the deals already taking place are examined. (UK)

The relative efficiency of market-based environmental policy instruments with imperfect compliance

OpenAIRE

Rousseau, Sandra; Proost, Stef

2004-01-01

This paper examines to what extent incomplete compliance of environmental regulation mitigates the distortions caused by pre-existing labour taxes. We study the relative cost efficiency of three market-based instruments: emission taxes, tradable permits and output taxes. In a first-best setting and given that monitoring and enforcement is costless, we find that the same utility levels can be reached with and without incomplete compliance. However, allowing for violations makes the policy i...

Tradeable CO2 emission permits for cost-effective control of global warming

International Nuclear Information System (INIS)

Kosobud, R.F.; South, D.W.; Daly, T.A.; Quinn, K.G.

1991-01-01

Many current global warming mitigation policy proposals call for large, near-term reductions in CO 2 emissions, thereby entailing high initial carbon emission tax rates or permit prices. This paper claims that these high initial tax rates or permit prices are not cost-effective in achieving the desired degree of climate change control. A cost-effective permit system is proposed and described that, under certain assumptions, would allow markets to optimally lead permit prices along a gradually increasing trajectory over tie. This price path presents the Hotelling result and would ease the abrupt, inefficient, and costly adjustments imposed on the fossil fuel and other industries in current proposals. This finding is demonstrated using the Argonne Model, a linear programming energy- environmental-economic model that allows for intertemporal optimization of consumer energy well-being. 12 refs., 3 figs., 1 tab

Estimation of emissions of volatile organic compounds in the fuel marketing terminal Recope, Alto de Ochomogo, Cartago, Costa Rica

Directory of Open Access Journals (Sweden)

Laura Vanessa Quesada Carvajal

2018-01-01

Full Text Available Context: This study presents the estimation of the evaporative emissions generated in the fuel distribution plant in El Alto de Ochomogo, Cartago, Costa Rica and the selection of the adequate recovery system to reduce the emission of these gases into the atmosphere, thus decreasing the adverse effects caused by these compounds in the environment and the health of nearby populations. Method: The fugitive emission rate estimated in the tanker vehicle loading process, using load loss emission factors, and fuel storage, through specialized software. Subsequently, we proceeded to make the selection of the appropriate treatment system, considering the flow capacity of the gaseous current that each technology can treat. Results: It was determined that the generation of VOCs is greater in the loading area than in the storage tanks, since they correspond to 95% and 5% respectively. Due to this, the proposal of the vapor treatment system focuses on the fuel-loading zone, selecting the cryogenic condensation as non-destructive recovery treatment. Conclusions: The estimation of the fugitive emission rate allowed to have a base to establish a strategy for the reduction of these emissions in favor of the health of the workers who are constantly exposed to them. To reduce direct emissions to the atmosphere during the loading of tanks. Necessary changes must be made to adapt them to an airtight system. That allows sending gasoline vapors that generated by the presence of residual product on the walls of trucks and due to the turbulence that arises during the loading of the new product, to the vapor recovery unit.

Greenhouse gas and clean energy markets: two sides of the same environmental coin

International Nuclear Information System (INIS)

Drummond, S.

2002-01-01

This article focuses on emission trading provided by the Flexibility Mechanisms of the Kyoto Protocol which are aimed at encouraging the development of renewable energy generation and are used to help lower the cost of reducing the emissions of greenhouse gases. The economic concept of emissions trading, international emissions trading, the Joint Implementation, and the Clean Development mechanism are examined. The categorization of the market activity for trading carbon dioxide equivalent into the pre-compliance, retail, and regulated markets are discussed along with market characteristics and opportunities for buyers and sellers. The role of the broker and market preparation are considered. A forward market spreadsheet is presented, and trade cycles for buyers and sellers are illustrated

National environmental targets and international emission reduction instruments

International Nuclear Information System (INIS)

Morthorst, P.E.

2003-01-01

According to the agreed burden sharing within the European Union the overall EU emission reduction target as agreed by in the Kyoto protocol is converted into national greenhouse gas reduction-targets for each of the member states. In parallel with national emission reduction initiatives common EU policies for emission reductions are considered. Currently discussed is the introduction of a market for tradable permits for CO 2 -emissions to achieve emission reductions within the power industry and other energy intensive industries. In parallel with this markets for green certificates to deploy renewable energy technologies seem to be appearing in a number of countries, among these Denmark, Italy, Sweden, Belgium (Flanders), England and Australia. Although these national initiatives for a green certificate market are fairly different, they could be a starting point for establishing a common EU certificate market. But interactions between national targets for greenhouse gas emissions and these international instruments for emission reduction are not a trivial matter, especially not seen in relation to the possible contributions of these instruments in achieving national GHG-reduction targets. The paper is split into three parts all taking a liberalised power market as starting point: The first part discusses the consequences of a general deployment of renewable energy technologies, using planning initiatives or national promotion schemes (feed-in tariffs). In the second part an international green certificate market is introduced into the liberalised power market context, substituting other national promotion schemes. Finally, in the third part a combination of an international green certificate market (TGC) and an international emission-trading scheme for CO 2 is analysed within the liberalised international power market set-up. The main conclusion is that neither the use of national renewable support schemes nor the introduction of a TGC-market into a liberalised

Surveillance report 2015-2016. Functioning of the wholesale electricity, CO_2 and natural gas markets

International Nuclear Information System (INIS)

2016-01-01

After a presentation of some key figures regarding the electric power and natural gas markets, this reports, illustrated by many data tables, discusses the integration of wholesale market surveillance in the European system: a complete and operational framework, constitution of a European register of participants, data reporting at the European level, link with financial regulation, and surveillance of wholesale agents. In the second part, it gives an overview of the context of the energy markets: drop in raw material prices, temperatures above normal with a particularly mild winter, sharp drop in the price of emission allowances. The third section proposes an analysis of wholesale electricity markets: fundamentals (evolutions of production and consumption, of production sources, D-7 nuclear availability), wholesale prices, major growth in exchanged volumes. The last section addresses wholesale natural gas markets: review of the gas system (evolution of demand and supply), evolution of gas prices, evolution of trading (global deliveries, spot and forward market)

Inter-trading permanent emissions credits and rented temporary carbon emissions offsets. Some issues and alternatives

International Nuclear Information System (INIS)

Sedjo, Roger A.; Marland, Gregg

2003-01-01

Permit trading among polluting parties is now firmly established as a policy tool in a range of environmental policy areas. The Kyoto Protocol accepts the principle that sequestration of carbon in the terrestrial biosphere can be used to offset emissions of carbon from fossil fuel combustion and outlines mechanisms. Although the lack of guaranteed permanence of biological offsets is often viewed as a defect, this paper argues that the absence of guaranteed permanence need not be a fundamental problem. We view carbon emissions as a liability issue. One purpose of an emissions credit system is to provide the emitter with a means to satisfy the carbon liability associated with her firm's (or country's) release of carbon into the atmosphere. We have developed and here expand on a rental approach, in which sequestered carbon is explicitly treated as temporary: the emitter temporarily satisfies his liability by temporarily 'parking' his liability, for a fee, in a terrestrial carbon reservoir, or 'sink,' such as a forest or agricultural soil. Finally, the paper relates the value of permanent and temporary sequestration and argues that both instruments are tradable and have a high degree of substitutability that allows them to interact in markets

Biodiesel CO2 emissions: A comparison with the main fuels in the Brazilian market

International Nuclear Information System (INIS)

Coronado, Christian Rodriguez; de Carvalho, Joao Andrade Jr.; Silveira, Jose Luz

2009-01-01

The use of biodiesel is increasing as an attractive fuel due to the depleting fossil fuel resources and environmental degradation. This paper presents results of an investigation on the potentials of biodiesel as an alternative fuel and main substitute of diesel oil, comparing the CO 2 emissions of the main fuels in the Brazilian market with those of biodiesel, in pure form or blended in different proportions with diesel oil (2%, 5%, and 20%, called B2, B5, and B20, respectively). The results of the study are shown in ton CO 2 per m 3 and ton CO 2 per year of fuel. The fuels were analyzed considering their chemical composition, stoichiometric combustion parameters and mean consumption for a single vehicle. The fuels studied were: gasoline, diesel oil, anhydrous ethyl alcohol (anhydrous ethanol), and biodiesel from used frying oil and from soybean oil. For the case of biodiesel, its complete life cycle and the closed carbon cycle (photosynthesis) were considered. With data provided by the Brazilian Association of Automotive Vehicle Manufacturers (ANFAVEA) for the number of vehicles produced in Brazil, the emissions of CO 2 for the national fleet in 2007 were obtained per type of fuel. With data provided by the Brazilian Department of Transit (DENATRAN) concerning the number of diesel vehicles in the last five years in Brazil, the total CO 2 emissions and the percentage that they would decrease in the case of use of pure biodiesel, B100, or several mixtures, B2, B5 and B20, were calculated. Estimates of CO 2 emissions for a future scenario considering the mixtures B5 and B20 are also included in this article. (author)

Implications of CO2 Emissions Trading for Short-run Electricity Outcomes in Northwest Europe

International Nuclear Information System (INIS)

Chen, Y.; Sijm, J.P.M.; Hobbs, B.F.; Lise, W.

2008-02-01

We examine the short-run implications of CO2 trading for power production, prices, emissions, and generator profits in northwest Europe in 2005. Simulation results from a transmission-constrained oligopoly model are compared with theoretical analyses to quantify price increases and windfall profits earned by generators. The analyses indicate that the rates at which CO2 costs are passed through to wholesale prices are affected by market competitiveness, merit order changes, and elasticities of demand and supply. Emissions trading results in large windfall profits, much but not all of which is due to free allocation of allowances. Profits also increase for some generators because their generation mix has low emissions, and so they benefit from electricity price increases. Most emission reductions appear to be due to demand response, not generation redispatch

Implications of CO2 Emissions Trading for Short-run Electricity Outcomes in Northwest Europe

Energy Technology Data Exchange (ETDEWEB)

Chen, Y. [School of Social Sciences, Humanities, and Arts and School of Engineering, Sierra Nevada Research Institute, University of California, Merced, 5200 N. Lake Rd., Merced, CA 95343 (United States); Sijm, J.P.M. [Policy Studies Unit, Energy Research Centre of the Netherlands ECN, P.O. Box 37154, 1020 Amsterdam (Netherlands); Hobbs, B.F. [Department of Geography and Environmental Engineering, The Johns Hopkins University, 3400 N. Charles St, Ames Hall, Baltimore, MD 21218 (United States); Lise, W. [IBS Research and Consultancy, Aga Hamami Caddesi, Aga Han 17/6, Cihangir, 34433 Beyoglu, Istanbul (Turkey)

2008-02-15

We examine the short-run implications of CO2 trading for power production, prices, emissions, and generator profits in northwest Europe in 2005. Simulation results from a transmission-constrained oligopoly model are compared with theoretical analyses to quantify price increases and windfall profits earned by generators. The analyses indicate that the rates at which CO2 costs are passed through to wholesale prices are affected by market competitiveness, merit order changes, and elasticities of demand and supply. Emissions trading results in large windfall profits, much but not all of which is due to free allocation of allowances. Profits also increase for some generators because their generation mix has low emissions, and so they benefit from electricity price increases. Most emission reductions appear to be due to demand response, not generation redispatch.

Simulation analysis of emissions trading impact on a non-utility power plant

International Nuclear Information System (INIS)

Imran, Kashif; Ahmad, Intesar; Hassan, Tehzeebul; Aslam, Muhammad Farooq; Ngan, Hon-Wing

2009-01-01

Non-utility power plants can competitively participate in open electricity market to reduce operational costs but in the absence of pollution charges or emissions trading such generators are tempted to cause greater pollution for profit maximization. This paper presents a solution that incorporates pollution charges for nitrogen oxides and sulphur dioxide emissions in line with existing national environmental quality standards and a new carbon dioxide emissions trading mechanism. A novel approach has been used for allocation of allowable emissions that favors efficiently fuelled and environmentally friendly operation for maximizing profit. Impact of proposed carbon trading on economical utilization of enormous indigenous coal reserves has been analyzed and determined to be acceptable. Software developed in this paper, harnessing Sequential Quadratic Programming capabilities of Matlab, is shown to be adequate simulation tool for various emissions trading schemes and an useful operational decision making tool for constrained non-linear optimization problem of a non-utility power plant. (author)

Simulation analysis of emissions trading impact on a non-utility power plant

Energy Technology Data Exchange (ETDEWEB)

Imran, Kashif; Ahmad, Intesar [Department of Electrical Engineering, COMSATS Institute of IT, Lahore (Pakistan); Hassan, Tehzeebul [Department of Electrical Engineering, University of Engineering and Technology (UET), Lahore (Pakistan); Aslam, Muhammad Farooq [Department of Electrical Engineering, University of Management and Technology (UMT), Lahore (Pakistan); Ngan, Hon-Wing [Department of Electrical Engineering, Hong Kong Polytechnic University (China)

2009-12-15

Non-utility power plants can competitively participate in open electricity market to reduce operational costs but in the absence of pollution charges or emissions trading such generators are tempted to cause greater pollution for profit maximization. This paper presents a solution that incorporates pollution charges for nitrogen oxides and sulphur dioxide emissions in line with existing national environmental quality standards and a new carbon dioxide emissions trading mechanism. A novel approach has been used for allocation of allowable emissions that favors efficiently fuelled and environmentally friendly operation for maximizing profit. Impact of proposed carbon trading on economical utilization of enormous indigenous coal reserves has been analyzed and determined to be acceptable. Software developed in this paper, harnessing Sequential Quadratic Programming capabilities of Matlab, is shown to be adequate simulation tool for various emissions trading schemes and an useful operational decision making tool for constrained non-linear optimization problem of a non-utility power plant. (author)

Consequences of Market-Based Measures CO2-emission Reduction Maritime Transport for the Netherlands; Gevolgen Market Based Measures CO2-emissiereductie zeevaart voor Nederland

Energy Technology Data Exchange (ETDEWEB)

Wortelboer-van Donselaar, P.; Kansen, M.; Moorman, S. [Kennisinstituut voor Mobiliteitsbeleid KiM, Den Haag (Netherlands); Faber, J.; Koopman, M.; Smit, M. [CE Delft, Delft (Netherlands)

2013-11-15

The introduction of Market Based Measures (MBMs) to reduce the CO2 emissions of international sea shipping will have relatively limited economic effects for the Netherlands. Moreover, these effects are largely in line with those in other countries. For the Netherlands, however, the manner in which MBMS are organised and enforced is likely to be particularly important, given the importance of ports to the Dutch economy, the country's relatively large bunker sector, and the fact that Dutch shipowners operate relatively small vessels and on a relatively small scale. MBMs include pricing measures in the form of tax or trade systems, as well as other market-related proposals. In this research study, the consequences are analysed of four international MBM proposals for the Netherlands [Dutch] Om de CO2-uitstoot van de internationale zeevaartsector terug te dringen worden momenteel zogeheten Market Based Measures (MBMs), zoals bijvoorbeeld het veilen van emissierechten of het invoeren van een heffing, overwogen. De invoering van de MBMs zal voor Nederland relatief beperkte economische effecten hebben. Deze effecten wijken bovendien niet bijzonder af van die voor andere landen. De wijze waarop de MBMs worden georganiseerd en gehandhaafd, is voor Nederland mogelijk wel van onderscheidend belang. Dit gezien het belang van de havens voor de Nederlandse economie, de relatief grote bunkersector, en de relatief kleine schepen en kleinschaligheid van de Nederlandse reders.

Influences from the European Parliament on EU emissions prices

International Nuclear Information System (INIS)

Deeney, Peter; Cummins, Mark; Dowling, Michael; Smeaton, Alan F.

2016-01-01

The decisions of the European Parliament (EP) are shown to influence both EU emission allowance (EUA) prices and volatility. Reductions in price and increases in volatility are observed when EP decisions are (i) not “party-political” in origin, (ii) made during times of low market sentiment, or (iii) made during times of low market attention. Daily EUA prices from 2007 to 2014 are used in the study, with decisions analysed using an event study approach for price impact, and a GARCH specification for volatility impact. Our findings suggest the need for policymakers to improve communication of long-term strategies for the EUA market. This aims to reduce the evident ongoing uncertainty experienced by traders around each decision made by the EP. The finding that sentiment and market attention at the time of an EP decision influences the market's reaction indicates a need to consider market dynamics in terms of decision timing, so that market turbulence is not an unintended by-product of an EP decision. Some form of medium term forward guidance may be called for. - Highlights: • Specific types of EP decisions lead to reduced carbon prices and increased volatility. • Decisions proposed by non-party-political groups have a significant effect. • There is a similar impact when market sentiment or news exposure is low. • Recommendation for some form of forward guidance.

Price and welfare effects of emission quota allocation

OpenAIRE

Golombek, Rolf; Kittelsen, Sverre A.C.; Rosendahl, Knut Einar

2011-01-01

Abstracts with downloadable Discussion Papers in PDF are available on the Internet: http://www.ssb.no Abstract: We analyze how different ways of allocating emission quotas may influence the electricity market. Using a large-scale numerical model of the Western European energy market, we show that different allocation mechanisms can have very different effects on the electricity market, even if the total emission target is fixed. This is particularly the case if output-based alloca...

Emission Trading under the Kyoto Protocol

Energy Technology Data Exchange (ETDEWEB)

Holtsmark, Bjart; Hagem, Cathrine

1998-12-01

This report discusses the potential gains from emission trading and raises some crucial questions. It shows that the total costs of the Kyoto Protocol could be reduced by about 95% through emission trading. Emission trading is an option also in the domestic arenas. The governments of the Annex B countries may allocate emission quotas to local enterprises as emission permits. Thus new markets for greenhouse gas emission quotas may emerge, domestically and internationally. It is emphasized that emission trading at the national and international levels must be discussed separately. The Nordic governments, for example, will find several good reasons for supporting emission trading at the international level if not necessarily domestically. The Nordic countries have already implemented domestic taxes on CO{sub 2} emissions and this tax policy could be sustained while these governments support and take part in emission trading at the international level.The report also considers a possible side effect of emission trading: free emission trading among Annex B countries could reduce the total abatement compared to a non-tradable policy as a consequence of the fact that some of the countries that are in transition to a market economy may be given emission limitations above their business-as-usual emissions. 40 refs., 7 figs., 4 tabs.

Electricity marketing and retailing

International Nuclear Information System (INIS)

Phillips, E.

2001-01-01

This power point presentation outlined the values of wholesale and retail marketing of natural gas to offer choice to all Canadians. The initial wholesale market dealt with physical bilaterals, financial bilaterals and transmission rights, while the mature wholesale market deals with futures contracts, reserve markets, dispatchable loads, swaps, trades and emissions trading. Wholesale prices include debt reduction charges, transmission charges transformation charges, ancillary charges, and independent market operator (IMO) fees. Retail rates offered by local distribution companies (LDC) include distribution charges, adjustments to SSS, and distribution losses. The role of marketers is to provide consumers with what they want, which is annual fixed rates with aggregation and load profiling as well as billing and procurement services

Carbon emissions and an equitable emission reduction criterion

International Nuclear Information System (INIS)

Golomb, Dan

1999-01-01

In 1995 the world-wide carbon emissions reached 5.8 billion metric tonnes per year (GTC/y). The Kyoto protocol calls for a reduction of carbon emissions from the developed countries (Annex I countries) of 6-8% below 1990 levels on the average, and unspecified commitments for the less developed (non-Annex I) countries. It is doubtful that the Kyoto agreement will be ratified by some parliaments, especially the USA Congress. Furthermore, it is shown that if the non-Annex I countries will not curtail their carbon emissions drastically, the global emissions will soar to huge levels by the middle of the next century. An equitable emission criterion is proposed which may lead to a sustainable rate of growth of carbon emissions, and be acceptable to all countries of the world. The criterion links the rate of growth of carbon emissions to the rate of growth of the Gross Domestic Product (GDP). A target criterion is proposed R = 0.15 KgC/SGDP, which is the current average for western European countries and Japan. This allows for both the growth of the GDP and carbon emissions. However, to reach the target in a reasonable time, the countries for which R≤ 0.3 would be allowed a carbon emission growth rate of 1%./y, and countries for which R≥ 0.3, 0.75%/y. It is shown that by 2050 the world-wide carbon emissions would reach about 10 GTC/y, which is about 3 times less than the Kyoto agreement would allow. (Author)

The new car market for electric vehicles and the potential for fuel substitution

International Nuclear Information System (INIS)

Kihm, Alexander; Trommer, Stefan

2014-01-01

Electric vehicles are expected to significantly reduce road transport emissions, given an increasingly renewable power generation. While technological issues are more and more being overcome, the economic viability and thus possible adoption is still constrained, mainly by higher prices than for conventional vehicles. In our work we analyze possible market developments for electric vehicles with an application to Germany. We develop a drivetrain choice model with economical, technical and social constraints on the current vehicle registrations and inventory. It estimates the demand for electric vehicles until 2030 for private and commercially registered cars as well as light commercial vehicles. The results show a replacement potential of almost one third of the total German annual mileage for these vehicles. The result has a high granularity to allow for detailed emission calculation along different spatial areas as well as vehicle and engine types. Besides a baseline forecast, our method allows for calculating different scenarios regarding policy actions or the future development of important parameters such as energy prices. The results provide insights for policy measures as well as for transport and environmental modeling. - Highlights: • We model the potential German market for electric vehicles using total cost of ownership. • The results show a substitution potential of one third of the total German annual mileage. • Plug-in hybrid drivetrains outperform battery electric ones due to their cost advantages. • Suburbia around large cities is the largest market for EVs. • The first main vehicle categories for EVs are large and medium-sized company cars

CO2 Allowance and Electricity Price Interaction

Energy Technology Data Exchange (ETDEWEB)

NONE

2007-07-01

With the introduction of CO2 emission constraints on power generators in the European Union, climate policy is starting to have notable effects on energy markets. This paper sheds light on the links between CO2 prices, electricity prices, and electricity costs to industry. It is based on a series of interviews with industrial and electricity stakeholders, as well as a rich literature seeking to estimate the exact effect of CO2 prices on electricity prices.

Slotting allowances to coordinate manufacturers’ retail sales effort

OpenAIRE

Foros, Øystein; Kind, Hans Jarle; Sand, Jan Yngve

2007-01-01

Slotting allowances are fees paid by manufacturers to get access to retailers’ shelf space. Although the main attention towards slotting allowances has been within the grocery industry, slotting allowances have also been applied within e.g. e-commerce and mobile telephony. In these industries we observe that distributors have large market power due to their control of access to customers. We analyse how shifting bargaining power from manufacturers to retailers and the use of slotting allowanc...

Analysis of the German market for voluntary carbon offsetting; Analyse des deutschen Marktes zur freiwilligen Kompensation von Treibhausgasemissionen

Energy Technology Data Exchange (ETDEWEB)

Kind, Christian; Duwe, Sebastian; Taenzler, Dennis; Reuster, Lena [adelphi research gGmbH, Berlin (Germany); Kleemann, Max; Krebs, Jan-Marten [sustainable AG, Muenchen (Germany)

2010-12-15

In the past years the market for voluntary carbon offsetting has developed rapidly. Certificates sold on this market originate partly from the compliance market, i.e. from projects of the Clean Development Mechanism and the Joint Implementation. Mostly, however, certificates stem from projects of the voluntary carbon market. Voluntary carbon offsetting can serve as another mechanism to efficiently prevent emissions, while at the same time achieving co-benefits. Very little is known however of the exact state of the voluntary carbon market, e.g. factors like business volume, market actors, origin of certificates or the efficacy of the voluntary market. Analyses of the market on the global market for voluntary offsetting do exist (ENDS, Hamilton et al. 2007, 2008, 2009); however they do not allow any conclusions for the market situation in Germany. This study aims at closing this gap. From the end of 2009 until the beginning of 2010 adelphi and sustainable interviewed providers of offset services, intermediaries, certifiers and consumers like businesses and public institutions on their activities in the voluntary carbon offset market in Germany. (orig.)

Lifecycle GHG emissions of palm biodiesel: Unintended market effects negate direct benefits of the Malaysian Economic Transformation Plan (ETP)

International Nuclear Information System (INIS)

Abdul-Manan, Amir F.N.

2017-01-01

Biodiesel expansion can lead to unintended effects that offset the direct GHG benefits of biofuels. Two documented unintended effects are the indirect land use change (ILUC) and indirect energy use change (IEUC). ILUC has been included in many lifecycle GHG studies of biofuels, but IEUC has remained relatively elusive. This paper presents an updated assessment of the lifecycle GHG emissions of palm biodiesel from Malaysia and, for the first time, incorporating the two estimated indirect effects simultaneously. Future GHG emissions of palm biodiesel are projected by taking into account of Malaysia's Economic Transformation Programme (ETP) that aims to reform the oil palm industry in order to achieve a high-income nation. Uncertainties associated with lifecycle GHG models were dealt with using Monte Carlo simulation in order to identify the breadth and likelihood of GHG reductions relative to petroleum-based fuels in the context of the European directives. This study has shown that the ETP, if successfully implemented, can significantly improve the direct GHG emissions of palm biodiesel, but the benefits are offset by the rise in global emissions due to ILUC and IEUC. Biofuel policies should also include IEUC, in addition to ILUC, to avoid GHG emissions leakages. - Highlights: • Estimate current and future lifecycle GHG emissions of Malaysian palm biodiesel. • Evaluate the GHG effects of Malaysia's Economic Transformation Plan (ETP). • Direct GHG benefits of biodiesel offset by indirect market effects. • Palm biodiesel unlikely to enable global GHG emissions reductions. • Global biofuel policy must account for indirect effects.

The IFIEC method for the allocation of CO2 allowances in the EU Emissions Trading Scheme. A review applied to the electricity sector

International Nuclear Information System (INIS)

Bart Wesselink; Sebastian Klaus Alyssa; Gilbert Kornelis Blok

2008-03-01

Recently the European Commission has published a proposal to improve the function of the EU-ETS by amending the Directive which establishes the EU-ETS. The main changes proposed are the establishment of one EU-wide cap and the use of auctioning for a much greater share of allowances than is currently the case, replacing most of the allocation free of charge. Auctioning of allowances will eliminate the so-called windfall profits that occur under the current allocation free of charge that is based on historic production and emission levels; a grandfathering approach. IFIEC EUROPE, the international federation of industrial energy consumers, asked Ecofys to review the method that IFIEC has developed in recent years to allocate CO2 allowances in the EU emissions trading scheme (EU-ETS). According to IFIEC, their allocation method guarantees the same environmental outcome as other methods, without causing windfall profits and with lower risks of competitiveness loss for so-called exposed industrial users of electricity. It was decided to focus this study on the European electricity sector. This was done for several reasons: CO2 emissions from electricity generation cover a large part of the overall emission under EU-ETS, the electricity sector has a single well defined output (electricity) that can be used to illustrate the potential impact of the IFIEC benchmark based allocation approach, and electricity is a substantial cost factor for IFIEC members. This evaluation covers many aspects of IFIEC's method and compares these with two other allocation methods: auctioning and historic grandfathering. Within the IFIEC method two example approaches are evaluated: a single benchmark for electricity production and fuel-specific benchmarks for coal and gas fired electricity production. In the evaluation, we cover the following aspects: What is the IFIEC method; how does it differ from other allocation methods in character (chapter 2); What is the impact of different allocation

Understanding the side effects of emission trading: implications for waste management.

Science.gov (United States)

Braschel, Nina; Posch, Alfred; Pierer, Magdalena

2014-01-01

The trading of emission allowances is an important market instrument in climate policy. However, the inclusion of certain branches of industry in the trading system not only provides incentives for emission reduction, it also entails unwanted side effects. Thus, the objective of the present study is to identify such side effects-positive and negative-by examining the potential impact of waste management inclusion in the European Union Emissions Trading Scheme (EU ETS). Desk research was supplemented with qualitative and quantitative empirical analysis (based on expert interviews and a questionnaire) in order to analyse the related perceptions and expectations of actors and stakeholders. The impact of waste management inclusion in the EU ETS is analysed in terms of the following three areas: (i) costs and cost pass-through, (ii), competitiveness and market position, and (iii) carbon leakage. Concerning expectations in the area of costs, both the interviewed experts and the practitioners surveyed thought that costs were likely to increase or that they could be passed on to customers. However, experts and practitioners differed with respect to the possibility of carbon leakage. Clearly, increased knowledge of the possible impact arising from inclusion of the waste sector in the EU ETS would enable managers to become more proactive and to manage waste streams and treatment options more economically.

European airlines enter the biofuels market. Business Project Report

Energy Technology Data Exchange (ETDEWEB)

Van den Heuvel, E.

2011-06-15

Biofuels might offer opportunities for achieving improved balance of power to the European airlines in their market environment. The aviation sector in Europe is a high competitive market. It faces high rivalry and increasing fuel costs due to rising oil prices. Moreover, from 2012 the sector will be subject to stringent rules with respect to maximum allowed carbon emissions. Investigating the competitive forces in the aviation sector and executing a strategic group analysis maps the competitors and the major players in the supply chain and the options they have for using alternative fuels for low carbon performance. Both the market and non-market strategies of several European airlines have been studied. It appears that airlines are aiming at first mover advantage by moving upstream in the biofuel value chain. They search for collaboration with other stakeholders to change government regulation to their benefit and influence public opinion and research agendas. Airlines are late entrants in the biofuels market. This research has shown that biofuels can improve the market power balance for European airlines. Biofuels are key to improve the carbon performance of airlines. However, this implies that airlines take position at the resource side of the value chain for biojetfuels. This has the advantage of controlling the security of supply and managing biofuels production complying to ruling sustainability criteria.

The Impact of Foreign Direct Investment (FDI on the Environment: Market Perspectives and Evidence from China

Directory of Open Access Journals (Sweden)

Jiajia Zheng

2017-03-01

Full Text Available Foreign direct investment (FDI may have a positive effect on the level of pollution in host countries, as described by the pollution haven hypothesis (PHH. However, this kind of effect may depend on the economic conditions in host countries. In this study, we conduct research on the FDI’s effect on China’s CO2 emissions during the market-oriented reform. The results are as follows. Firstly, FDI directly promotes China’s CO2 emissions. Secondly, with market-oriented reform, this positive effect from FDI is lowering year by year, which indicates that the market-oriented reform could alleviate the positive effect of FDI on China’s CO2 emissions. Thirdly, as China’s market-oriented reform was implemented gradually from experimental zones to the whole country, regional market development is uneven, and as such so is FDI’s effect on local CO2 emissions. Provinces in the eastern area generally evidenced higher market development and lower CO2 emissions from FDI, while four provinces in west area evidenced both lower market development and higher CO2 emissions from FDI.

Understanding the role of marketing communications in direct marketing

NARCIS (Netherlands)

P. Naik; N. Piersma (Nanda)

2002-01-01

textabstractThe standard RFM models used by direct marketers include behavioral variables, but ignore the role of marketing communications. In addition, RFM models allow customer responsiveness to vary across different customers, but not across diiferent time periods. Hence, the authors first

Explaining European Emission Allowance Price Dynamics: Evidence from Phase II

OpenAIRE

Wilfried Rickels; Dennis Görlich; Gerrit Oberst

2010-01-01

In 2005, the European Emission Trading Scheme (EU-ETS) established a new commodity: the right to emit a ton of CO2 (EUA). Since its launch, the corresponding price has shown rather turbulent dynamics, including nervous reactions to policy announcements and a price collapse after a visible over-allocation in Phase I. As a consequence, the question whether fundamental factors (fossil fuel prices, economic activity, weather) affect the EUA price remained partially unresolved. Today, being halfwa...

Expectations and forward risk premium in the Spanish deregulated power market

International Nuclear Information System (INIS)

Furio, Dolores; Meneu, Vicente

2010-01-01

Deregulation in energy markets has entailed important changes in the way agents conduct business. Price risk arises as a result of fluctuations in the future price of electricity and agents assume long or short positions in the forward and spot markets to hedge their exposure to price risk. The presence of forward risk premium in prices is evidence of the fact that agents act in the market according to risk considerations. This work aims to analyse the information content of the difference between the forward and spot prices (the so-called forward premium) regarding the agents' decisions. We find that the sign and magnitude of the ex post forward premium depend on the unexpected variation in demand and on the unexpected variation in the hydroelectric capacity, and that both the ex post and the ex ante forward premia are negatively related to the variance of spot price, as predict. We provide additional insights about relevant aspects of spot price pricing in the Spanish electricity market such as the positive relation between spot prices and CO 2 emission allowance prices or the impact on spot prices of the set of market matching rules introduced in March 2006.

Panorama 2014 - Overview of new carbon markets at international level

International Nuclear Information System (INIS)

Coussy, Paula

2013-12-01

Although carbon prices on the European Emissions Trading Scheme (ETS) are at their lowest since 2008 and international negotiations in relation to the United Nations Framework Convention on Climate Change have been stagnating since the 2009 Copenhagen Agreement, nearly seventeen emissions trading markets have been identified at international level. Without counting the European ETS which has existed since 2005, eleven new markets have emerged since 2008 and a further five are set to commence trading in 2014. Of these eleven active markets, five are in Asia, three are in North America, one is in Oceania, one is in Central Asia and one is in Europe. It should be pointed out that to date, no markets are scheduled to begin trading in Africa. Although four markets have announced their intention to work together between now and 2020, the creation of an international emissions trading scheme is not on the immediate horizon. (author)

U.S. broiler housing ammonia emissions inventory

Science.gov (United States)

Gates, R. S.; Casey, K. D.; Wheeler, E. F.; Xin, H.; Pescatore, A. J.

Using recently published baseline ammonia emissions data for U.S. broiler chicken housing, we present a method of estimating their contribution to an annual ammonia budget that is different from that used by USEPA. Emission rate increases in a linear relationship with flock age from near zero at the start of the flock to a maximum at the end of the flock, 28-65 days later. Market weight of chickens raised for meat varies from "broilers" weighing about 2 kg to "roasters" weighing about 3 kg. Multiple flocks of birds are grown in a single house annually, with variable downtime to prepare the house between flocks. The method takes into account weight and number of chickens marketed. Uncertainty in baseline emissions estimates is used so that inventory estimates are provided with error estimates. The method also incorporates the condition of litter that birds are raised upon and the varying market weight of birds grown. Using 2003 USDA data on broiler production numbers, broiler housing is estimated to contribute 8.8-11.7 kT ammonia for new and built-up litter, respectively, in Kentucky and 240-324 kT ammonia for new and built-up litter, respectively, nationally. Results suggest that a 10% uncertainty in annual emission rate is expected for the market weight categories of broilers, heavy broilers, and roasters. A 27-47% reduction in annual housing emission rate is predicted if new rather than built-up litter were used for every flock. The estimating method can be adapted to other meat bird building emissions and future ammonia emission strategies, with suitable insertion of an age-dependent emission factor or slope into a predictive model equation. The method can be readily applied and is an alternative to that used by USEPA.

Emissions trading and green power : profitability for buyers and sellers

International Nuclear Information System (INIS)

Haites, E.

1998-01-01

Proposed features of the competitive electricity market in Ontario were reviewed. The speaker predicted that demand for renewable energy in Ontario's competitive electricity market will be affected by green power, emissions trading, labelling, and renewables portfolio standard. Under current regulations retailers can charge customers a premium for purchasing electricity generated by 'green' sources. The existing limits on emissions of sulphur dioxide, nitrogen oxides and carbon dioxides will remain in place, but an emissions cap and trading program for all Ontario-based generation is an option to consider. Ontario's Market Design Committee (MDC) has recommended the implementation of emissions trading for electricity-related air pollutants for all generators located in Ontario. The complex mechanics of emission trading are explained. The MDC recommendation of the use of standard labels to disclose the mix of energy sources used by sellers of electricity and their associated pollution emissions are also summarized

42 CFR 417.534 - Allowable costs.

Science.gov (United States)

2010-10-01

... typical “provider” costs, and costs (such as marketing, enrollment, membership, and operation of the HMO... principles applicable to provider costs, as set forth in § 417.536. (2) The allowability of other costs is determined in accordance with principles set forth in §§ 417.538 through 417.550. (3) Costs for covered...

EU Emission Trading - better job second time around?

International Nuclear Information System (INIS)

Schleich, Joachim |; Betz, Regina; Rogge, Karoline |

2007-01-01

The EU Emission Trading Scheme (EU ETS) for CO 2 -emissions from energy and industry installations reflects a paradigm shift towards market-based instruments for environmental policy in the EU. The centerpieces of the EU ETS are National Allocation Plans (NAPs), which individual Member States (MS) design for each phase. NAPs state the total quantity of allowances available in each period (ET-budget) and determine how MS allocate allowances to individual installations. The NAPs thus govern investments and innovation in energy efficient technologies and the energy sector. In terms of distribution, they predetermine winners and losers. In this paper we analyze and evaluate 25 NAPs submitted to the European Commission (EC) for phase 2 (2008-2012) of the EU ETS. At the macro level, we assess whether the submitted ET-budgets are stringent, and whether they imply a cost-efficient split of the required emission reductions between the EU ETS sectors (energy and industry) and the remaining sectors (transportation, tertiary and households). Comparing the submitted ET-budgets with those already approved by the EC suggests that the EC's decisions significantly improved the effectiveness and economic efficiency of the EU ETS. But given the high share of Kyoto Mechanisms companies are allowed to use, the EU ETS is unlikely to require substantial emission reductions within the EU. At the micro level, we assess (across countries and phases) the allocation methods for existing and new installations, for closures and for clean technologies. A comparison of the NAPs for the second phase and the first phase (2005-2007) provides insights into the (limited) adaptability and flexibility of the scheme. The findings provide guidance for the future design of the EU ETS and applications to other sectors and regions

The Long Road from Ljubljana to Kyoto: Implementing Emission Trading Mechanisms and CO2 Tax

Directory of Open Access Journals (Sweden)

Tanja Markovič-Hribernik

2006-03-01

Full Text Available According to the Kyoto Protocol, Slovenia is required to reduce GHG emissions to an average of 8% below base year 1986 emissions in the period 2008-2012. Slovenia established different measures for reducing GHG emissions long before its ratification. It was first transition country who implemented CO2 tax in the 1997. Several changes in CO2 tax have not brought the desired results. CO2 emissions have actually increased. At the beginning of 2005, Slovenia joined other EU member states by implementing the emissions trading instrument, defined by new EU Directive. At the same time, Slovenia has adopted a new CO2 tax system, which is compatible with the new circumstances. The main purpose of this paper is to present the characteristics of Slovenian approach to national allocation plan for emissions trading and analyze the problems of the CO2 tax in Slovenia. Paper also describes the compliance cost of achieving the Kyoto target and expected movements on the Slovenian allowances market.

Climate - These carbon markets which seduce industries

International Nuclear Information System (INIS)

Chandes, C.

2011-01-01

As many countries try to give a price to their carbon emissions, beyond the constraint carbon emissions represent, European industries consider these future carbon markets as financial opportunities. Some countries are inspired by the European trading system, and European industries think they will value their experience with this system on these new markets, notably by selling their consultancy expertise, and also because the factories they possess in these countries, China for example, already comply with European standards

Great expectations. Can international emissions trading deliver an equitable climate regime?

International Nuclear Information System (INIS)

Baumert, Kevin A.; Perkaus, James F.; Kete, Nancy

2003-01-01

Climate change equity debates tend to focus on achieving a fair and global 'allocation' of emission rights among countries. Allocation proposals typically envision, if implicitly, two purposes for international emissions trading. First, trading is expected to serve as a cost-effective means of promoting compliance with emissions targets. Second, trading is posited as a means to generate financial transfers, typically from industrialized to transitioning and developing countries. This article investigates the common assumption that international emissions trading will effectively serve both of these purposes. We conclude that the two purposes might not be mutually supportive, and that efforts to use international emissions trading as a financial transfer mechanism may potentially undermine cost-effectiveness goals. International emissions trading on a global scale would create new risks in terms of both cost-effectiveness and environmental performance, some of which will be challenging to manage. In particular, uncertainties over market prices and trading eligibility, coupled with the costs of participation, may together be the Achilles heel of some allocation proposals that entail large financial transfers from industrialized to developing countries. Any proposal for an 'equitable' allocation of emission allowances, we conclude, must be cognizant of the risks and costs implied by a reliance on international emissions trading. We offer some suggestions to this end

CO2 trade and market power in the EU electricity sector

International Nuclear Information System (INIS)

Tinggaard Svendsen, G.; Vesterdal, M.

2002-01-01

The EU commission is planning to launch an emission trading market for greenhouse gases within near future. This to meet its obligations under the United Nations Framework Convention on Climate Change and the Kyoto Protocol. After a theoretical discussion on market power in such a market, wc turn to the empirical evidence which suggests that a reasonable number of sources of C02 emissions in the power sector exists for bollers larger than 25MW. Overall, together with the contestable single market for electricity, the risk of significant strategies behaviour seems negligible. Thus, the electric utility sector seems a suitable testing ground for an EU-scheme of emissions trading. In the longer run, it will be important to broaden the scope of the trading scheme as the inclusion of other sectors will further limit the risk of market power. (au)

CO2 trade and market power in the EU electricity sector

Energy Technology Data Exchange (ETDEWEB)

Tinggaard Svendsen, G; Vesterdal, M

2002-07-01

The EU commission is planning to launch an emission trading market for greenhouse gases within near future. This to meet its obligations under the United Nations Framework Convention on Climate Change and the Kyoto Protocol. After a theoretical discussion on market power in such a market, wc turn to the empirical evidence which suggests that a reasonable number of sources of C02 emissions in the power sector exists for bollers larger than 25MW. Overall, together with the contestable single market for electricity, the risk of significant strategis behaviour seems negligible. Thus, the electric utility sector seems a suitable testing ground for an EU-scheme of emissions trading. In the longer run, it will be important to broaden the scope of the trading scheme as the inclusion of other sectors will further limit the risk of market power. (au)

Hitting emissions targets with (statistical) confidence in multi-instrument Emissions Trading Schemes

International Nuclear Information System (INIS)

Shipworth, David

2003-12-01

A means of assessing, monitoring and controlling aggregate emissions from multi-instrument Emissions Trading Schemes is proposed. The approach allows contributions from different instruments with different forms of emissions targets to be integrated. Where Emissions Trading Schemes are helping to meet specific national targets, the approach allows the entry requirements of new participants to be calculated and set at a level that will achieve these targets. The approach is multi-levelled, and may be extended downwards to support pooling of participants within instruments, or upwards to embed Emissions Trading Schemes within a wider suite of policies and measures with hard and soft targets. Aggregate emissions from each instrument are treated stochastically. Emissions from the scheme as a whole are then the joint probability distribution formed by integrating the emissions from its instruments. Because a Bayesian approach is adopted, qualitative and semi-qualitative data from expert opinion can be used where quantitative data is not currently available, or is incomplete. This approach helps government retain sufficient control over emissions trading scheme targets to allow them to meet their emissions reduction obligations, while minimising the need for retrospectively adjusting existing participants' conditions of entry. This maintains participant confidence, while providing the necessary policy levers for good governance

Complexity Analysis of Carbon Market Using the Modified Multi-Scale Entropy

Directory of Open Access Journals (Sweden)

Jiuli Yin

2018-06-01

Full Text Available Carbon markets provide a market-based way to reduce climate pollution. Subject to general market regulations, the major existing emission trading markets present complex characteristics. This paper analyzes the complexity of carbon market by using the multi-scale entropy. Pilot carbon markets in China are taken as the example. Moving average is adopted to extract the scales due to the short length of the data set. Results show a low-level complexity inferring that China’s pilot carbon markets are quite immature in lack of market efficiency. However, the complexity varies in different time scales. China’s carbon markets (except for the Chongqing pilot are more complex in the short period than in the long term. Furthermore, complexity level in most pilot markets increases as the markets developed, showing an improvement in market efficiency. All these results demonstrate that an effective carbon market is required for the full function of emission trading.

Mitigation of Global Warming with Focus on Personal Carbon Allowances

DEFF Research Database (Denmark)

Meyer, Niels I

2008-01-01

The mitigation of global warming requires new efficient systems and methods. The paper presents a new proposal called personal carbon allowances with caps on the CO2 emission from household heating and electricity and on emission from transport in private cars and in personal air flights. Results...

Market power in electricity markets: Beyond concentration measures

International Nuclear Information System (INIS)

Borenstein, S.; Bushnell, J.; Knittel, C.R.

1999-01-01

The wave of electricity market restructuring both within the US and abroad has brought the issue of horizontal market power to the forefront of energy policy. Traditionally, estimation and prediction of market power has relied heavily on concentration measures. In this paper, the authors discuss the weaknesses of concentration measures as a viable measure of market power in the electricity industry, and they propose an alternative method based on market simulations that take advantage of existing plant level data. The authors discuss results from previous studies they have performed, and present new results that allow for the detection of threshold demand levels where market power is likely to be a problem. In addition, the authors analyze the impact of that recent divestitures in the California electricity market will have on estimated market power. They close with a discussion of the policy implications of the results

Looking Forward. The Carbon Markets

International Nuclear Information System (INIS)

Wilder, M.

2006-02-01

An overview is given of possible future developments in the market for carbon dioxide emissions trading. In this presentation it is concluded that the carbon market is here and now, that the carbon market is global and China and India are major players, that global capital is on the move and delay is dangerous, that there is a world of opportunity for Australian companies and with inaction there is a risk to fall off the fringe

Combining high-resolution gross domestic product data with home and personal care product market research data to generate a subnational emission inventory for Asia.

Science.gov (United States)

Hodges, Juliet Elizabeth Natasha; Vamshi, Raghu; Holmes, Christopher; Rowson, Matthew; Miah, Taqmina; Price, Oliver Richard

2014-04-01

Environmental risk assessment of chemicals is reliant on good estimates of product usage information and robust exposure models. Over the past 20 to 30 years, much progress has been made with the development of exposure models that simulate the transport and distribution of chemicals in the environment. However, little progress has been made in our ability to estimate chemical emissions of home and personal care (HPC) products. In this project, we have developed an approach to estimate subnational emission inventory of chemical ingredients used in HPC products for 12 Asian countries including Bangladesh, Cambodia, China, India, Indonesia, Laos, Malaysia, Pakistan, Philippines, Sri Lanka, Thailand, and Vietnam (Asia-12). To develop this inventory, we have coupled a 1 km grid of per capita gross domestic product (GDP) estimates with market research data of HPC product sales. We explore the necessity of accounting for a population's ability to purchase HPC products in determining their subnational distribution in regions where wealth is not uniform. The implications of using high resolution data on inter- and intracountry subnational emission estimates for a range of hypothetical and actual HPC product types were explored. It was demonstrated that for low value products (500 US$ per capita/annum required to purchase product) the implications on emissions being assigned to subnational regions can vary by several orders of magnitude. The implications of this on conducting national or regional level risk assessments may be significant. Further work is needed to explore the implications of this variability in HPC emissions to enable the HPC industry and/or governments to advance risk-based chemical management policies in emerging markets. © 2013 SETAC.

Evaluation of the European Commission's proposal to set aside emission allowances. Effects on the EU carbon price and Dutch ETS companies

Energy Technology Data Exchange (ETDEWEB)

Verdonk, M.; Vollebergh, H.

2012-11-15

A set-aside of CO2 allowances would reduce the current oversupply in the European Emissions Trading System (ETS). This would result in temporary higher CO2 prices. However, a literature study has shown that the impact of the European Commission's proposal on CO2 prices is likely to be limited, because the total amount of allowances up to 2020 would remain unchanged. However, the proposal sends out a signal to investors that the functioning of the ETS is a priority for politicians, and increases the likelihood of further reforms. Any negative impact of back loading on ETS companies in the Netherlands is likely to be limited.

Stock Market Integration Measurement: Investigation of Malaysia and Singapore Stock Markets

OpenAIRE

B. K. Yeoh; Z. Arsad; C. W. Hooy

2010-01-01

This paper tests the level of market integration between Malaysia and Singapore stock markets with the world market. Kalman Filter (KF) methodology is used on the International Capital Asset Pricing Model (ICAPM) and the pricing errors estimated within the framework of ICAPM are used as a measure of market integration or segmentation. The advantage of the KF technique is that it allows for time-varying coefficients in estimating ICAPM and hence able to capture the varying degree of market int...

Tendances Carbone no. 70 'The EU ETS and the economic downturn: falling emissions and increasing use of credits'

International Nuclear Information System (INIS)

Berghmans, Nicolas; Stephan, Nicolas

2012-01-01

Among the publications of CDC Climat Research, 'Tendances Carbone' bulletin specifically studies the developments of the European market for CO 2 allowances. This issue addresses the following points: The publication of the 2011 compliance data confirms that the EU ETS carbon price will remain at a low level in the short and medium term. These data indicate a drop in CO 2 emissions by 2.1% and the return of 254.7 million Kyoto credits up 86% compared to 2010. In the context of a growing surplus of allowances since 2008, these two trends further weaken the demand for allowances

Are car manufacturers on the way to reduce CO2 emissions?: A DEA approach

International Nuclear Information System (INIS)

Voltes-Dorta, Augusto; Perdiguero, Jordi; Jiménez, Juan Luis

2013-01-01

One of the pillars of the fight against climate change is reducing the amount of greenhouse gases that are emitted into the atmosphere. In that regard, curtailing CO 2 emissions from transport activities is a major objective. In its attempts of “decarbonising” transport, the European Commission set in 2009 different emission limits on the vehicles sold in Europe. With this background, this paper aims to test the ability of the major car manufacturers to meet these present and future targets with the existing technological trends. To that end, we provide an in-depth analysis on the temporal evolution of emission efficiencies in the Spanish car market. The well-known DEA-Malmquist method is applied over a large sample of car models sold in Spain between 2004 and 2010. A second-stage regression allows us to identify the main drivers of efficiency, catch-up and technical change over the period. Finally, the estimated trends are extrapolated to predict future emission levels for the car manufacturers. Using post-regulation rates of technical change, results show that the vast majority of companies would meet the 2015 target, 27% of the current market would meet the 2020 target, and around 3% would be able to comply with the 2025 target. Thus, since all targets are technologically feasible, stricter regulation is the recommended approach to encourage manufacturers to meet the goals set by the European Commission. - Highlights: • We test the ability of car manufacturers to meet emission targets. • A DEA-Malmquist model is estimated using panel data between 2004 and 2010. • With post-2007 technical change, the vast majority of companies beat the 2015 target. • 27% of the market meets the 2020 target, and 3% meets the 2025 target. • More stringent regulation is needed to meet the goals set by the European Authorities

CO2 trading and its influence on electricity markets. Final report for DTe

International Nuclear Information System (INIS)

Franke, M.

2006-02-01

The Dutch Ministry of Economics has asked the Dutch energy regulator (DTe) to gather factual information about the impact of the introduction of the European CO2 emission trading scheme (EU ETS) on the functioning of the Dutch wholesale electricity market and, in particular, to estimate the extent of windfall profits that generators may have realised as a consequence of the EU ETS. DTe has in turn appointed Frontier Economics to assist in the preparation of its advice to the Ministry. Separately, but as a parallel task, DTe has also asked us to provide guidance on the way in which DTe should monitor the performance of the wholesale electricity market in an era of CO2 trading. Section 2 describes the EU ETS, as background to the study. The section describes the institutional context, the way that the emission trading system has generally been implemented at a national level, and the way that the price of European Union Allowances (EUAs or allowances) has developed historically. Section 3 describes the way in which the EU ETS has had an impact on the Dutch electricity market including: the allocation of EUAs to the power sector in the Netherlands; the (theoretical) impact of the EU ETS on electricity generators' incentives; evidence on generators' behaviour; and the empirical evidence of the relationship between EUA prices and electricity prices (or spark and dark spreads). Section 4 provides a conceptual framework for the estimation of windfall profits. Section 5 deals with detailed assumptions that we have made and data issues we have encountered in our attempts to estimate windfall profits; and Section 6 presents and discusses our estimates of windfall profits

Implications of carbon cap-and-trade for US voluntary renewable energy markets

International Nuclear Information System (INIS)

Bird, Lori A.; Holt, Edward; Levenstein Carroll, Ghita

2008-01-01

Many consumers today are purchasing renewable energy in large part for the greenhouse gas (GHG) emissions benefits that they provide. Emerging carbon regulation in the US has the potential to affect existing markets for renewable energy. Carbon cap-and-trade programs are now under development in the Northeast under the Regional Greenhouse Gas Initiative (RGGI) and in early stages of development in the West and Midwest. There is increasing discussion about carbon regulation at the national level as well. While renewable energy will likely benefit from carbon cap-and-trade programs because compliance with the cap will increase the costs of fossil fuel generation, cap-and-trade programs can also impact the ability of renewable energy generation to affect overall CO 2 emissions levels and obtain value for those emissions benefits. This paper summarizes key issues for renewable energy markets that are emerging with carbon regulation, such as the implications for emissions benefits claims and voluntary market demand and the use of renewable energy certificates (RECs) in multiple markets. It also explores policy options under consideration for designing carbon policies to enable carbon markets and renewable energy markets to work together

Innovation and risk-averse firms: Options on carbon allowances as a hedging tool

International Nuclear Information System (INIS)

Szolgayová, Jana; Golub, Alexander; Fuss, Sabine

2014-01-01

In a regulated world where government seeks to decarbonize the energy sector, firms face both indirect and direct costs of emitting CO 2 . This study seeks to take the perspective of the firm, which needs to maximize profits implying minimization of (carbon) cost as well. In this study, the firm can compose the cost-optimal portfolio of (a) investing into carbon-saving technology, which is currently expensive, (b) investing into carbon-saving technology R and D and adopt this technology at a later point, (c) buying allowances per ton of emitted CO 2 in a carbon market (alternatively this could be formulated as a tax), and (d) buying offsets traded in the same market, which are based on reduced emissions from deforestation and degradation (REDD+). Uncertainties in the cost of carbon coming from a lack of commitment in policy-making leading to fluctuations in markets and uncertainty in the payoff of R and D activities could provide disincentives to incur large up-front sunk cost and raise the economic value of being flexible. We apply a real options approach with stochastic carbon-saving technology costs and stochastic CO 2 costs. Assuming that firms are risk-averse, they will not only value flexibility, but also risk reductions from diversification over the different (carbon mitigation) options. - Highlights: • We study the compliance problem of a private firm under both regulatory and technological uncertainty in an optimal control setting. • When firms are risk-averse, forest-backed offset options will be part of the compliance portfolio. • R and D creates valuable options on new technology

Social, economic, and resource predictors of variability in household air pollution from cookstove emissions.

Directory of Open Access Journals (Sweden)

Gautam N Yadama

Full Text Available We examine if social and economic factors, fuelwood availability, market and media access are associated with owning a modified stove and variation in household emissions from biomass combustion, a significant environmental and health concern in rural India. We analyze cross-sectional household socio-economic data, and PM(2.5 and particulate surface area concentration in household emissions from cookstoves (n=100. This data set combines household social and economic variables with particle emissions indexes associated with the household stove. The data are from the Foundation for Ecological Society, India, from a field study of household emissions. In our analysis, we find that less access to ready and free fuelwood and higher wealth are associated with owning a replacement/modified stove. We also find that additional kitchen ventilation is associated with a 12% reduction in particulate emissions concentration (p<0.05, after we account for the type of stove used. We did not find a significant association between replacement/modified stove on household emissions when controlling for additional ventilation. Higher wealth and education are associated with having additional ventilation. Social caste, market and media access did not have any effect on the presence of replacement or modified stoves or additional ventilation. While the data available to us does not allow an examination of direct health outcomes from emissions variations, adverse environmental and health impacts of toxic household emissions are well established elsewhere in the literature. The value of this study is in its further examination of the role of social and economic factors and available fuelwood from commons in type of stove use, and additional ventilation, and their effect on household emissions. These associations are important since the two direct routes to improving household air quality among the poor are stove type and better ventilation.

Aviation and climate change : aircraft emissions expected to grow, but technological and operational improvements and government policies can help control emissions

Science.gov (United States)

2009-06-01

A number of policy options to address aircraft emissions are available to governments and can be part of broader policies to address emissions from many sources including aircraft. Market-based measures can establish a price for emissions and provide...

Effects of national energy policies on carbon dioxide emissions in a European internal electricity market: Results from a simulation model of the European power systems

OpenAIRE

Hoster, Frank

1997-01-01

This article considers the economic and environmental (in terms of CO2) effects of national energy policies in a European Single Market for electricity. It was found that the combined CO2/Energy-tax proposed by the European Commission would be able to stabilise the current volume of CO2-emissions in the electricity sector. A national single handed effort in introducing a CO2-tax to reduce the emissions was found to be ineffective in the long term and would be in addition allocative inefficien...

Etika Marketing Syariah

Directory of Open Access Journals (Sweden)

Luqman Nurhisam

2017-12-01

Full Text Available Marketing activities (marketing which is the activity of distributing goods and services ranging from producers to the hands of consumers. In this case there are some fundamental questions that encompass marketing activities (marketing; ranging from what is marketed, who is marketing, to how goods and services are marketed through the activities of marketing functions such as purchase, sales, transportation, and so forth. The problem that arises then is, most of the producers/the company with the marketers (marketers who do not consider the moral and ethical aspects of marketing the products they offer, the most important for them is how to make the products they offer acceptable and successful and control the market share. Especially if the marketer is pressed by the target company that must be achieved and the bonus will be obtained, then to achieve the target, not infrequently a marketer doing various ways, to the point of crashing the signs and ethics that have been established in religion. This study aims to analyze how the ethical aspect in the concept and practice in marketing (marketing sharia by the company / producer of goods and services. The research method used in this research is descriptive qualitative analysis, using linguistic or language approach that is describe the concept and structure of marketing language as it is. From this study it can be concluded that the majority of scholars allow the concepts and practices in sharia marketing, seen from the process of creation, the process of bidding, as well as the process of change of value (value in sharia marketing there should be no things that conflict with the principles that exist in sharia. As long as it can be guaranteed, and deviation of principles in sharia does not occur in any transaction inside marketing, it can be allowed in syarak. As well as in the ethical aspect has also fulfilled the spiritual elements that are spiritual based, the divinity is sourced from the

[Healthcare marketing elements].

Science.gov (United States)

Ameri, Cinzia; Fiorini, Fulvio

2014-01-01

Marketing puts its foundation on a few key concepts: need-demand, product-service, satisfaction, exchange, market, or business structure manufacturing / supply. The combination of these elements allows you to build an effective marketing strategy. Crucial in this respect is to remember the Porter matrix, which shows that for a correct analysis of the relevant market is necessary to refer to the "five forces at play", ie: customers, competitors, new entrants and substitutes threat. Another key lever for proper marketing oriented approach is the continuous and constant monitoring of the application, anticipating their dissatisfactions.

Greenhouse gas emissions trading and project-based mechanisms. Proceedings - CATEP

Energy Technology Data Exchange (ETDEWEB)

NONE

2004-01-01

Greenhouse gas emissions trading and project-based mechanisms for greenhouse gas reduction are emerging market-based instruments for climate change policy. This book presents a selection of papers from an international workshop co-sponsored by the OECD and Concerted Action on Tradeable Emissions Permits (CATEP), to discuss key research and policy issues relating to the design and implementation of these instruments. The papers cover the experience of developing and transition countries with greenhouse gas emissions trading and project-based mechanisms. In addition, the papers examine the use of tradeable permits in policy mixes and harmonisation of emissions trading schemes, as well as transition issues relating to greenhouse gas emissions trading markets.

Simulation-Based Analysis of the Potential of Alternative Fuels towards Reducing CO2 Emissions from Aviation

Directory of Open Access Journals (Sweden)

Karsten Kieckhäfer

2018-01-01

Full Text Available The mid-term framework of global aviation is shaped by air travel demand growth rates of 2–5% p.a. and ambitious targets to reduce aviation-related CO2 emissions by up to 50% until 2050. Alternative jet fuels such as bio- or electrofuels can be considered as a potential means towards low-emission aviation. While these fuels offer significant emission reduction potential, their market success depends on manifold influencing factors like the maturity of the production technology or the development of the price of conventional jet fuel. To study the potential for adoption of alternative jet fuels in aviation and the extent to which alternative fuels can contribute to the reduction targets, we deploy a System Dynamics approach. The results indicate that the adoption of alternative fuels and therefore their potential towards low-emissions aviation is rather limited in most scenarios considered since current production processes do not allow for competitive prices compared to conventional jet fuel. This calls for the development of new production processes that allow for economic feasibility of converting biomass or hydrogen into drop-in fuels as well as political measures to promote the adoption of alternative fuels.

Energy Efficiency Market Report 2013: Market Trends and Medium-Term Prospects

Energy Technology Data Exchange (ETDEWEB)

NONE

2013-07-01

Energy efficiency has been referred to as a ''hidden fuel'', one that extends energy supplies, increases energy security, lowers carbon emissions and generally supports sustainable economic growth. Yet it is hiding in plain sight: in 2011, investments in the energy efficiency market globally were at a similar scale to those in renewable energy or fossil-fuel power generation. The Energy Efficiency Market Report provides a practical basis for understanding energy efficiency market activities, a review of the methodological and practical challenges associated with measuring the market and its components, and statistical analysis of energy efficiency and its impact on energy demand. It also highlights a specific technology sector in which there is significant energy efficiency market activity, in this instance appliances and ICT. The report presents a selection of country case studies that illustrate current energy efficiency markets in specific sectors, and how they may evolve in the medium term. The energy efficiency market is diffuse, varied and involves all energy-consuming sectors of the economy. A comprehensive overview of market activity is complicated by the challenges associated with quantifying the components of the market and the paucity of comparable reported data. This report underscores how vital high-quality and timely energy efficiency data is to understanding this market.

The current situation and mid-term prospects for European electricity markets

International Nuclear Information System (INIS)

Helm, Dieter

2013-01-01

This analysis of the current situation and mid-term prospects for European electricity markets presents: the objectives of energy policy, the historical legacy, the attempts at European integration and the Internal Energy Market (IEM), the coming of the Climate Change Package, the impact of the world economic and Euro-zone crises, the impact of shale gas and the new world of fossil fuel abundance, the impact of renewables on emissions, the impact of renewables on electricity markets, the EU emissions trading system (EU ETS) and the renewables and the electricity markets, the coming of capacity crunch in some cases, the capacity markets, the return of central buyers and national energy policies, and what is to be done for the world electricity markets

Allocation of emission permits with leakage through capital markets

International Nuclear Information System (INIS)

Maestad, Ottar

2007-01-01

This paper analyses how tradable emission permits should be allocated to firms when capital is internationally mobile. When international environmental problems are attempted solved through uncoordinated policies between countries, it might be desirable for the home country to issue free emission permits in proportion to the use of capital in order to prevent leakage through international capital movements. The desirability of free emission permits will however be reduced if capital also can be employed in a domestic non-polluting sector. In this case, it may even be optimal to tax the use of capital in the polluting sector. It is also shown that it is always optimal to subsidise the use of capital in the polluting sector if the use of labour is taxed at an optimal rate. Finally, leakage does not affect the optimal domestic emission limit as long as appropriate capital subsidies and labour taxes are implementeed. (author)

Introduction to market power issues

International Nuclear Information System (INIS)

2002-01-01

This paper presents an initial introduction to market power issues in wholesale electric power markets. Market power was described as the ability of sellers to act together to profitably maintain prices above competitive levels for a significant period of time. The two general forms of market power, vertical and horizontal market power, were described with reference to how they may be exercised. The factors that should be considered when evaluating the competitiveness of a market include: (1) market share of suppliers, (2) overall market concentration, (3) elasticity of demand, (4) shape of the industry supply curve, (5) the amount and distribution of excess supply, (6) typical contractual arrangements and the process for establishing prices, and (7) the relative ease to enter the market. It was noted that a narrow market scope allows only wholesale market sector (such as municipal utilities) to access competitive electricity supplies, however, a more expansive definition of market scope would consider the sale of electricity to industrial customers. This would allow more players to enter the Nova Scotia market. The barriers to entry for wholesale electric power markets are: (1) access to the transmission grids and services, (2) sites for new capacity development, (3) major inputs to power generation, (4) transportation of major inputs to generation, and (5) lack of liquidity

International aviation emissions to 2025: Can emissions be stabilised without restricting demand?

International Nuclear Information System (INIS)

Macintosh, Andrew; Wallace, Lailey

2009-01-01

International aviation is growing rapidly, resulting in rising aviation greenhouse gas emissions. Concerns about the growth trajectory of the industry and emissions have led to calls for market measures such as emissions trading and carbon levies to be introduced to restrict demand and prompt innovation. This paper provides an overview of the science on aviation's contribution to climate change, analyses key trends in the industry since 1990, projects international civil aviation emissions to 2025 and analyses the emission intensity improvements that are necessary to offset rising international demand. The findings suggest international aviation carbon dioxide (CO 2 ) emissions will increase by more than 110 per cent between 2005 and 2025 (from 416 Mt to between 876 and 1013 Mt) and that it is unlikely emissions could be stabilised at levels consistent with risk averse climate targets without restricting demand

Indian oil company joins efforts to reduce methane emissions

Science.gov (United States)

Kumar, Mohi

The Oil and Natural Gas Corp, Ltd. (ONGC), headquartered in Dehradun, India, has joined seven U.S. and Canadian oil and natural gas companies as a partner in a U.S. Environmental Protection Agency program to reduce greenhouse gas emissions. EPA's Natural Gas STAR International Program aims to reduce methane emissions from the oil and natural gas sector while delivering more gas to markets around the world. With this partnership, ONGC agrees to implement emissions reduction practices and to submit annual reports on progress achieved; EPA agrees to assist ONGC with training technicians in new cost-effective technologies that will help achieve target emissions. The Natural Gas STAR International Program is administered under the Methane to Markets Partnership, a group of 20 countries and 600 companies across the globe that since 2004 has volunteered to cut methane emissions. More information on EPA's agreement with ONGC can be found at http://www.epa.gov/gasstar/index.htm; information about the Methane to Markets Partnership can be found at http://www.methanetomarkets.org.

Conditions for a market uptake of climate services for adaptation in France

Directory of Open Access Journals (Sweden)

Romain Cavelier

2017-04-01

Full Text Available This perspective paper reports the results of a collaborative survey of French research institutes concerned with environmental issues, which examined the potential for a market uptake of climate services for adaptation in France. The study is based on a review of existing reports on the market of climate services, and on interviews of 68 climate service providers and users in public and private organizations. Although the study does not allow to provide quantified estimations regarding the present and future size of the market, its results offer new perspectives with implications extending far beyond the sole case of France: first, while the market is still in its infancy, significant opportunities exist in sectors such as flooding risks, and, to a slightly lesser extent, hydro and nuclear energy and viticulture. In addition, the study identifies critical conditions for the uptake in climate services: (1 a coordinated delivery of data, information, expertise and training by public research institutes concerned with climate change and its impacts; (2 the inclusion of adaptation in the regulation and in public and private tenders. Finally, (3 uncertainties in climate projections appear as a major barrier to the uptake of climate services. However, ambitious greenhouse gas emission reduction as planned by the COP-21 Paris Agreement contribute to reducing this uncertainties by allowing users to select a subset of climate change projections, avoiding those for which adaptation is most problematic.

Market power and output-based refunding of environmental policy revenues

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