Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/268386 
Year of Publication: 
2022
Series/Report no.: 
Ilmenau Economics Discussion Papers No. 169
Publisher: 
Technische Universität Ilmenau, Institut für Volkswirtschaftslehre, Ilmenau
Abstract: 
Since its introduction, the European Emissions Trading Scheme (EU ETS) has been struggling with an oversupply of emission allowances and a highly volatile allowance price. One reason for the price decline is technological progress and ist demand-reducing effect, which is only partially taken into account in the system. We propose a simple benchmark approach to endogenously adjust the supply of allowances to technical progress. Using a non-parametric benchmark approach, we measure the required adjustment of the allowance supply to avoid a technologyinduced price decline and to maintain the incentive to invest in low-carbon technologies.
Subjects: 
EU ETS
emission allowances
Data Envelopment Analysis
endogenous adjustment of supply
technological change
yardstick competition
Document Type: 
Working Paper

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