| Title | COVID-19, Green Deal and recovery plan permanently change emissions and prices in EU ETS Phase IV |
|---|---|
| ID_Doc | 63126 |
| Authors | Bruninx, K; Ovaere, M |
| Title | COVID-19, Green Deal and recovery plan permanently change emissions and prices in EU ETS Phase IV |
| Year | 2022 |
| Published | Nature Communications, 13, 1 |
| Abstract | The EU emissions trading system's (ETS) invalidation rule implies that shocks and overlapping policies can change cumulative carbon emissions. This paper explains these mechanisms and simulates the effect of COVID-19, the European Green Deal, and the recovery stimulus package on cumulative EU ETS emissions and allowance prices. Our results indicate that the negative demand shock of the pandemic should have a limited effect on allowance prices and rather translates into lower cumulative carbon emissions. Aligning EU ETS with the 2030 reduction target of -55% might increase allowance prices to 45-94 euro/ton CO2 today and reduce cumulative carbon emissions to 14.2-18.3 GtCO(2) compared to 23.5-33.1 GtCO(2) under a -40% 2030 reduction target. Our results crucially depend on when the waterbed will be sealed again, which is an endogenous market outcome, driven by the EU ETS design, shocks and overlapping climate policies such as the recovery plan. This paper finds that the EU's 2030 reduction target of -55% might correspond to EU ETS allowance prices between 45 and 94 e/ton CO2 today, while the invalidation rule reduces carbon emissions to 14.2 to 18.3 GtCO2 over the EU ETS' remaining lifetime. |
| https://www.nature.com/articles/s41467-022-28398-2.pdf |
Similar Articles
| ID | Score | Article |
|---|---|---|
64334
|
Osorio, S; Tietjen, O; Pahle, M; Pietzcker, RC; Edenhofer, O Reviewing the Market Stability Reserve in light of more ambitious EU ETS emission targets(2021) | |
| 63931
|
Gerlagh, R; Heijmans, RJRK; Rosendahl, KE An endogenous emissions cap produces a green paradox(2021)Economic Policy, 36, 107 | |
| 64629
|
Rickels, W; Rothenstein, R; Schenuit, F; Fridahl, M Procure, Bank, Release: Carbon Removal Certificate Reserves to Manage Carbon Prices on the Path to Net-Zero(2022) | |
| 63025
|
Kattelmann, F; Siegle, J; Montenegro, RC; Sehn, V; Blesl, M; Fahl, U How to Reach the New Green Deal Targets: Analysing the Necessary Burden Sharing within the EU Using a Multi-Model Approach(2021)Energies, 14, 23 | |
| 63369
|
Acar, S; Asici, AA; Yeldan, AE Potential effects of the EU's carbon border adjustment mechanism on the Turkish economy(2022)Environment Development And Sustainability, 24, 6 | |
| 63030
|
Pietzcker, RC; Osorio, S; Rodrigues, R Tightening EU ETS targets in line with the European Green Deal: Impacts on the decarbonization of the EU power sector(2021) | |
| 62835
|
Ruiz, J; Martin-Moreno, JM; Perez, R Mid-term policy considerations of the EU green deal(2023) | |
| 68818
|
Vondrusková, B; Nemcová, I; Horák, J Carbon Trading Under The Eu Ets And Energy Prices: A Case Of The Czech Republic(2010)Politicke Vedy, 13, 4 | |
| 62950
|
Cassetti, G; Boitier, B; Elia, A; Mouël, P; Gargiulo, M; Zagamé, P; Nikas, A; Koasidis, K; Doukas, H; Chiodi, A The interplay among COVID-19 economic recovery, behavioural changes, and the European Green Deal: An energy-economic modelling perspective(2023) | |
| 33031
|
Fragkos, P; Fragkiadakis, K Analyzing the Macro-Economic and Employment Implications of Ambitious Mitigation Pathways and Carbon Pricing(2022) |