Covering Indirect Emissions Mitigates Market Power in Carbon Markets: The Case of South Korea

Shim, Sunghee; Lee, Jiwoong

doi:10.3390/su8060583

Cited by 4 publications

(2 citation statements)

References 17 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…To adapt to the regulated electricity market, the K‐ETS is designed to include direct emissions from the energy production process and indirect emissions from electricity consumption. This seeks to address the incomplete pass‐through and reduce the market power of energy‐generating companies (Kim & Lim, 2014; Shim & Lee, 2016). However, the design caused inefficiency in the early phases of the K‐ETS.…”

Section: Resultsmentioning

confidence: 99%

The divergence of South Korea's Emissions Trading Scheme (ETS) from the EU ETS: An institutional complementarity view

Joo,

Paavola,

Van Alstine

2023

Politics & Policy

View full text Add to dashboard Cite

Emissions trading schemes (ETS) have spread across the globe to tackle climate change. However, limited attention has been given to how ETS characteristics and designs differ and why. We use the concept of institutional complementarity to explore how the EU ETS and South Korea's ETS (K‐ETS) adapt to complement established political economy. The EU ETS is characterized as a market with stakeholder ownership, while the K‐ETS is more regulatory in nature with government leadership. The EU ETS complements a decentralized political system with liberalized energy market, and the K‐ETS became compatible with the centralized majoritarian politics and a regulated electricity market. The ETSs have evolved incrementally, and they are not likely to link in the foreseeable future due to divergence. We suggest a strong focus on “how to adapt” an ETS to its own institution rather than adopting the established blueprint model in countries with a strong regulatory style of governance.Related ArticlesCaliskan, Cantay. 2020. “The Influence of Elite Networks on Green Policy Making.” Politics & Policy 48(6): 1104–37. https://doi.org/10.1111/polp.12382.Tanaka, Yugo, Andrew Chapman, Tetsuo Tezuka, and Shigeki Sakurai. 2020. “Multiple Streams and Power Sector Policy Change: Evidence from the Feed‐In Tariff Policy Process in Japan.” Politics & Policy 48(3): 464–89. https://doi.org/10.1111/polp.12357.von Malmborg, Fredrik. 2023. “Combining the Advocacy Coalition Framework and Argumentative Discourse Analysis: The Case of the ‘Energy Efficiency First’ Principle in EU Energy and Climate Policy.” Politics & Policy 51(2): 222–41. https://doi.org/10.1111/polp.12525.

show abstract

Section: Resultsmentioning

confidence: 99%

The divergence of South Korea's Emissions Trading Scheme (ETS) from the EU ETS: An institutional complementarity view

Joo,

Paavola,

Van Alstine

2023

Politics & Policy

View full text Add to dashboard Cite

show abstract

“…Zeng et al (2018) show that, in the Chinese ETS system, the double-counting of both direct and indirect emissions from the power sector could serve to safeguard the environmental effectiveness and would further reduce distortions in the potential joint markets linked with EU-ETS. Shim and Lee (2016) argue that including indirect emissions within the coverage of an emissions trading scheme can help to reduce the market power of power supplier, and thereby enhance economic efficiency by showing that the market concentration measured by the Herfindahl-Hirschman Index significantly drops when including indirect emissions in the South Korean ETS.…”

Section: Regulation Of Indirect Emissions and Power Dispatch Under K-etsmentioning

confidence: 99%

Treatment of indirect emissions from the power sector in Korean emissions trading system

Kim

Lim

2020

Environ Econ Policy Stud

View full text Add to dashboard Cite

This paper analyzes the effects of carbon pricing on the economy, focusing specifically on the power sector under retail-price control. A simulation analysis using a CGE model implicates that it is desirable not to bestow the power sector with carbon pricing waiver to avoid a severe burden to the economy in terms of real GDP and real consumption. And excessive carbon price burden on GHG emissions in the power sector under Korean emissions trading system, where not only direct but also indirect emissions are covered, can and needs to be relieved through intensity-based (output-based) updating allocation of allowances to the power sector. Finally, we have reached a somewhat counter-intuitive conclusion that we can achieve higher economic efficiency by treating both fossil and non-fossil power plants equally when implementing the output-based updating allowance allocation for the power sector.

show abstract

Assessing initial conditions and ETS outcomes in a fossil-fuel dependent economy

Howie

Atakhanova

2022

Energy Strategy Reviews

View full text Add to dashboard Cite

Covering Indirect Emissions Mitigates Market Power in Carbon Markets: The Case of South Korea

Cited by 4 publications

References 17 publications

The divergence of South Korea's Emissions Trading Scheme (ETS) from the EU ETS: An institutional complementarity view

The divergence of South Korea's Emissions Trading Scheme (ETS) from the EU ETS: An institutional complementarity view

Treatment of indirect emissions from the power sector in Korean emissions trading system

Assessing initial conditions and ETS outcomes in a fossil-fuel dependent economy

Contact Info

Product

Resources

About