The strategic use of auctioning revenues to foster energy efficiency: status quo and potential within the European Union Emissions Trading System

Wiese, Catharina; Cowart, Richard; Rosenow, Jan

doi:10.1007/s12053-020-09894-0

Cited by 11 publications

(3 citation statements)

References 15 publications

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“…For example, prominent market-based instruments are based on tradable certificates to support investments in energy efficiency [54] to help achieve decarbonization objectives, paving the way for efficiency gains [55]. However, the interaction between alternative policy instruments has also generated overlapping concerns with reference to the efficiency of the combined policy tools [56,57]. This is confirmed by previous studies that have analyzed the risks and opportunities of the coexistence of different instruments to achieve environmental goals [38,58,59].…”

Section: Discussionmentioning

confidence: 75%

Emissions trading system: bridging the gap between environmental targets and fair competition

Beccarello,

Di Foggia

2023

Environ. Res. Commun.

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The effectiveness of the European Emissions Trading System in supporting a level playing field while reducing total emissions is tested. While data show a robust impact on the environment as a steady decrease in carbon emissions is observed, it is reported that its ability to internalize emission costs may improve to better address the import of extra European generated emissions that negatively impact the economy when not properly accounted for. Analyzing data in six European countries between 2016 and 2020, the results suggest competitive advantages for industries with higher extra-European imports of inputs that result in biased production costs that, in turn, alter competitive positioning. The novelty lies in focusing on the threats to fair competition within Europe along with the well-known carbon leakage risk widely investigated by previous literature. Complementary policy tools capable of internalizing emission costs, regardless of their origin, are necessary to improve the healthy functioning of the system. In this regard, carbon taxation may outperform carbon border adjustment, as it is based on consumption patterns. Our results can aid policymakers in designing impact analyses aimed at limiting potential distortions to Europe's level playing field.

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Section: Discussionmentioning

confidence: 75%

Emissions trading system: bridging the gap between environmental targets and fair competition

Beccarello,

Di Foggia

2023

Environ. Res. Commun.

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“…The present study examines the interconnections among revenue management strategies used by ETS, with a specific focus on the utilization of revenue. Wiese et al (2020) have discovered that revenue utilization has a key role in green earmarking. Therefore, the research has discovered that it is not feasible and seems to be unattainable to individually handle each attribute in isolation.…”

Section: Discussionmentioning

confidence: 99%

The road to carbon trading in Malaysia: Unpacking knowledge and experience through scoping review and in-depth interviews

Alias,

Saarani,

Amran

et al. 2023

J. Infras. Policy. Dev.

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The emission trading scheme (ETS) is arguably one of the most effective approaches for encouraging industries to transition to a low-carbon economy and, as a result, assisting nations in meeting their goals under the United Nations Framework Convention on Climate Change to mitigate the challenge of climate change. ETS is gaining popularity as more governments throughout the world contemplate implementing it, particularly in developing countries. Much of the existing research has concentrated on debates concerning ETS operations in developed nations. This study is to give a discourse of the success criteria for ETS implementation that have been identified in the literature and then cross-referenced in the context of Malaysia. For this, the research used an integrated approach of scoping review of existing literature and in-depth interviews with Malaysian stakeholders. Using Narassimhan et al. (2018)’s ETS assessment framework, the scoping review identified five major attributes that lead to successful ETS implementation in a global context that are environmental effectiveness, economic efficiency, market management, stakeholder engagement, and revenue management. In-depth interviews with several groups of discovered stakeholder engagement as an essential attribute that would play a critical role in advancing ETS implementation in Malaysia. The study concludes by proposing a complete strategy based on empirical information and first-hand narratives, providing useful insights for politicians, industry players, and environmental activists. The recommendation is especially important as Malaysia strives to improve its commitment to sustainable and responsible development in light of the challenges posed by climate change.

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“…However, the interaction between carbon pricing tools based on cap and trade and other market instruments has also given rise to some complex issues and worries, mainly in terms of opportunity costs and the relative efficiency of the two mechanisms when combined (Böhringer et al, 2008;Cludius et al, 2020;Wiese et al, 2020).…”

Section: Introductionmentioning

confidence: 99%

Opportunity Cost of Carbon Pricing and White Certificate Programs: A Business Case

Foggia¹,

Beccarello²

2022

JSD

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Carbon pricing aims to capture the external costs of emissions and link them to their sources through a price signal, while market-based policy tools support investments in energy efficiency, rewarding investors following certified energy savings. The interplay between the emission trading system and the white certificate scheme is complex, especially regarding opportunity costs and the efficiency of the two mechanisms combined in achieving environmental goals. Using monthly data covering six years, we analyze how carbon pricing and white certificate programs intertwine. We consider the opportunity cost as the savings from an energy efficiency intervention under the white certificate program in a firm covered by the emission trading system. We calculate the €/MWh savings corresponding to a one MWh reduction in energy consumption to assess the contribution of white certificates and the emission trading system as determinants of the savings induced by an energy efficiency intervention. We then simulate how the economic determinants of saving vary as the dynamics of the gas and emission permit markets change. The relative weight of the components on saving differs significantly according to the dynamics of the related commodity and environmental markets. Provided that the emission trading system is mandatory for certain industries while participation in a white certificate scheme is voluntary, we argue that the overlap between the two mechanisms can be effective. This is important for policymaking, periodic fine-tuning interventions to market-based mechanisms, and increasing flexibility. The paper also has business implications, given that energy managers may use this framework in building energy management strategies.

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The strategic use of auctioning revenues to foster energy efficiency: status quo and potential within the European Union Emissions Trading System

Cited by 11 publications

References 15 publications

Emissions trading system: bridging the gap between environmental targets and fair competition

Emissions trading system: bridging the gap between environmental targets and fair competition

The road to carbon trading in Malaysia: Unpacking knowledge and experience through scoping review and in-depth interviews

Opportunity Cost of Carbon Pricing and White Certificate Programs: A Business Case

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