Mission Impossible!? On the Harmonization of National Allocation Plans Under the EU Emissions Trading Directive

30 Pages Posted: 20 May 2004 Last revised: 14 Aug 2008

See all articles by Christoph Böhringer

Christoph Böhringer

University of Oldenburg - Economic Policy; Centre for European Economic Research (ZEW)

Andreas Lange

University of Hamburg

Date Written: 2004

Abstract

Starting in 2005, the EU will implement a CO2 emissions trading scheme. In this paper we show that the outspoken goals of economic efficiency and free allocation of allowances are incompatible with harmonized allocation rules. In general, the assignment of allowances is endogenous and differs widely across countries, thereby substantiating concerns for implicit state aid and competitive distortions. We discuss potential adjustments to the Directive in order to allow for harmonization, i.e. for identical assignment factors to similar firms located in different EU countries.

Keywords: Emissions trading, allowance allocation, national allocation plan, competitive distortions

JEL Classification: D58, H21, H23, Q50, Q58

Suggested Citation

Bohringer, Christoph and Lange, Andreas, Mission Impossible!? On the Harmonization of National Allocation Plans Under the EU Emissions Trading Directive (2004). ZEW - Centre for European Economic Research Discussion Paper No. 04-015, Available at SSRN: https://ssrn.com/abstract=547724 or http://dx.doi.org/10.2139/ssrn.547724

Christoph Bohringer (Contact Author)

University of Oldenburg - Economic Policy ( email )

Centre for European Economic Research (ZEW) ( email )

D-68161 Mannheim
Germany
+49 6211235200 (Phone)
+49 6211235226 (Fax)

Andreas Lange

University of Hamburg ( email )

Allende-Platz 1
Hamburg, 20146
Germany

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