Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/53202 
Year of Publication: 
2009
Series/Report no.: 
Nota di Lavoro No. 110.2009
Publisher: 
Fondazione Eni Enrico Mattei (FEEM), Milano
Abstract: 
We use historical industrial emissions data to assess the level of abatement and overallocation that took place across European countries during the pilot phase (2005-2007)of the European Union Emission Trading Scheme. Using a dynamic panel data model, we estimate the counterfactual (business-as-usual) emissions scenario for EU member states. Comparing this baseline to allocated and verified emissions, we conclude that both overallocation and abatement occurred, along with under-allocation and emissions inflation. Over the three trading years of the pilot phase we find over-allocation of approximately 376 million EUAs (6%) and total abatement at the member state level of 107 Mt CO2 (1.8%). However, due to over-allocation and possible uncertainty about future allocation methodologies, we calculate that emissions inflation of approximately 119 Mt CO2 (2%) occurred, resulting in emissions over the pilot phase being approximately 12 Mt CO2 (0.2%) higher than they would have been in the absence of the EU ETS.
Subjects: 
Emissions Trading Scheme
Climate Policy
Dynamic Panel Data Analysis
JEL: 
C23
O13
Q54
Q58
Document Type: 
Working Paper

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