Emissions trading with transaction costs

Working paper by Marc Baudry, Anouk Faure, Simon Quemin on 25 Jun 2020

The authors of this paper develop a theoretical model of emissions trading in the presence of transaction costs, calibrating the model to annual transactions and compliance data in the European Union emissions trading scheme over its second phase.

Using supply-side policies to raise ambition: the case of the EU ETS and the 2021 review

Working paper by Simon Quemin on 10 Mar 2020

Following reform of the EU emissions trading system (ETS) in 2018 further regulatory amendments are on the horizon as part of the 2021 review. This paper evaluates and compares the impacts of realistic regulatory changes within the ETS to inform the 2021 review and raise ambition, examining two main policy levers: the linear reduction factor and the market stability reserve. read more »

Emissions trading with rolling horizons

Working paper by Simon Quemin, Raphaël Trotignon on 30 Aug 2019

The authors of this paper develop a model to evaluate first, the market developments in the European Union emissions trading scheme (EU ETS) over 2008–2017 ex-post and second, the performances of main features of the EU ETS reforms that took place in 2018, ex-ante. read more »

Global lessons for the UK in carbon taxes

Policy publication by Josh Burke, Rebecca Byrnes, Sam Fankhauser on 2 Aug 2019

This policy brief analyses global trends in carbon taxation and differences in tax design around the world to draw out lessons for the design of a possible new carbon tax for the UK, as the country plans how to meet its ambitious new net-zero emissions target and how it prices carbon after Brexit. read more »

The global consumer incidence of carbon pricing: evidence from trade

Working paper by Lutz Sager on 4 Apr 2019

This paper estimates the global distribution of the costs to consumers from carbon pricing, finding that some policies may be considered regressive for their burden on poorer consumers – but that the benefits from mitigating climate change may weaken or reverse the regressive effect. read more »

Linking permit markets multilaterally

Working paper by Baran Doda, Simon Quemin, Luca Taschini on 27 Feb 2019

A patchwork of emissions trading systems (ETSs) currently operate in several jurisdictions, including the EU, Switzerland, South Korea and several US states and Canadian provinces. China has also been experimenting with emissions trading in seven provinces and cities and is setting up a national system that will be much larger than the current largest system, […]

Intertemporal emissions trading and market design: an application to the EU ETS

Working paper by Simon Quemin, Raphaël Trotignon on 15 Jan 2019

The authors of this paper develop a model to assess the market stability reserve, a key feature of reforming the European Union’s emissions trading system (EU ETS), concluding that it is successful in raising the allowance price, but is limited in its ability to improve the system’s resilience to allowance demand shocks. read more »

Trust, compliance and international regulation

Working paper by Ara Jo on 12 Jun 2018

This paper uses data on the compliance of installations regulated under the EU Emissions Trading Scheme to investigate how the levels of trust in a country affect the compliance of firms with regulations on climate change. read more »