Publisher:
Universität Hamburg, Fakultät für Wirtschafts- und Sozialwissenschaften, WiSo-Forschungslabor, Hamburg
Abstract:
The final design choices for Phase IV of the EU ETS are about to be made. With the introduction of the market stability reserve several additional design parameters have been introduced into the EU ETS. This paper explores how changes in these parameters impact on allowance price paths. Four parameters are investigated. They differ substantially in whether, how and when they affect allowance prices. Finally, the proposal by the environmental committee of the European Parliament from December 2016 is projected to unambiguously increase prices at all points in time but to render the market stability reserve (almost) redundant.
