Strategic Implications of the EU ETS Review in a Post-2012 Perspective
CEPS Task Force Report:
Shaping the Global Arena: Preparing the EU Emissions Trading Scheme for the post-2012 Period
Authors: Christian Egenhofer & Noriko Fujiwara
Having been underway for more than two years, the review of the EU Emissions Trading Scheme (EU ETS) is entering a decisive phase with the European Commission’s recent announcement that it will table formal proposals in the second half of 2007. Based on an assessment of the EU ETS, this new CEPS Task Force Report tests the performance of four different design models (a cap-and-trade system based on free allocation, benchmarks, auctioning and a credit-and-baseline system) against 10 criteria under three headings: environmental effectiveness, economic efficiency and the contribution of the ETS to achieving long-term climate change policy objectives. Based on this assessment, the report makes a number of recommendations in the area of allocation, creation of investment incentives and the merits of including new sectors and new gases. The report also addresses the particular challenge of completing the EU ETS review before a global post-2012 agreement can be reached, i.e. the EU ETS will be reviewed against an unknown global context.
Date Published: 6 March 2007
Dan Gagnier, Senior Vice President, Corporate and External Affairs, Alcan Inc.
Christian Egenhofer, CEPS Senior Fellow
Noriko Fujiwara, CEPS Fellow
1st meeting: 14 March 2006
2nd meeting: 4 April 2006
3rd meeting: 31 May 2006
4th meeting: 20 Sept 2006
5th meeting: 20 Oct 2006