Abatement under the EU ETS? : Evidence from selected sectors

Wien

2013

S.72-73

Artikel aus einer ZeitschriftUnselbständiges Werk

200180601

The EU Emission Trading Scheme (EU ETS) was introduced with the objective of achieving emission reductions in the regulated sectors in a cost efficient way. Meanwhile there is a lively discussion in economic literature whether or not it effectively achieved abatement or not. Several studies conclude that abatement occurred despite over-allocation of allowances. The analyses have, however, to be interpreted with caution given the uncertainty related to the fact that actual emissions are only compared to an assumed Business as Usual projection, i.e. estimates regarding the counterfactual nopolicy case. We aim to contribute to this discussion by analyzing the development in three energy intensive EU ETS sectors (electricity and heat, cement and lime, pulp and paper) since the start of the EU ETS in 2005 in more detail regarding their production, energy use and CO2 emissions. We analyze how the selected sectors were affected by the economic development and whether changes in emissions were mainly related to changes in output or to other factors as well (e.g. fuel shifts). In the analysis, we apply an exact decomposition approach based on a Laspeyres index model as laid out in Sun and Ang (2000). As changes in the fuel mix may account for a large proportion in emission reductions in electricity and heat supply as well as pulp and paper production, for these sectors we use an extended decomposition approach that differentiates between different energy sources as put forward by Steckel et al. (2011). For the analysis of the three ETS sectors various data sources are used: Data on transformation output and input are taken from the IEA Energy Balances. Emission data stem from the UNFCCC National Inventory Reports 2012. Data on lime production as well as on final energy consumption also are taken from the UNFCCC Reports while for pulp and paper production and cement production the FAO database and data from the U.S. Geological Survey are used respectively.