Publications

The EU ETS has moved from centerstage to the backseat of European decarbonization policy. Reform is needed in order to provide clarity on the long term emission reduction objectives (for phase 4 beyond 2020), but most importantly, to introduce some form of allowance supply management and thereby reduce the risk of future policy intervention. Following […]

Extraordinary economic circumstances and interactions between climate and energy policies have meant that the EU’s industrial CO2 emissions are now much lower than expectations when the EU ETS’ emissions reduction objectives were set. Since this has reduced the demand for EU ETS emissions allowances relative to a fixed supply, the price of allowances has fallen […]

By Julien Chevallier The reaction of the carbon price to changes in macroeconomic fundamentals can be understood from different levels. My recent academic research has identified two strong linkages. First, there is a link between the EU carbon price and financial markets, such as equity and bond markets. These analyses emphasize how the volatility of […]

By Igor SHISHLOV, Valentin BELLASSEN et Benoît LEGUET Based on specific projects rather than economy-wide emissions reductions, and driven by the demand from the installations covered by the European Union Emissions Trading Scheme (EU ETS), Joint Implementation (JI) turned out to be a largely private sector mechanism. Besides attracting private investors in GHG abatement projects, […]

By Romain MOREL et Anaïs DELBOSC The Nationally Appropriate Mitigation Actions (NAMAs) framework has emerged as a result of the Copenhagen and Cancún Agreements and is used to encourage developing countries to reduce their greenhouse gas (GHG) emissions. Theses NAMAs can be part of more comprehensive domestic low-carbon development strategies. However, new projects and policies, […]

By Oliver Sartor This paper provides an econometric analysis of the evidence of carbon leakage from the European primary aluminium industry during the first 6 ½ years of the EU ETS. The findings suggest that while rising electricity prices have played a critical role in reducing the competitiveness of EU primary aluminium smelting in recent […]

By Alain CORMIER and Valentin BELLASSEN The Clean Development Mechanism (CDM), launched in 2001, has attracted more than 7 000 projects. Many however, did not fully deliver the emissions reductions promised in their project design documents: out of 1.8 billion of expected Certified Emissions Reductions (CER) by April 1st, 2011, only 576 million had been […]

In order to achieve its long-term emission reduction target following the Fukushima incident, Japan would rely more heavily on international offsetting activities. Concurrent to vigorous proposals to reform the CDM, Japan is also promoting an offset crediting scheme through bilateral agreements with developing countries as a post-2012 market mechanism. Despite potential benefits, issues relating to […]

By Emilie ALBEROLA The inclusion of the aviation sector from January 1st 2012 onwards represents a new step in the implementation of the EU Emissions Trading Scheme (EU ETS). Following the steady expansion of the EU ETS’ scope to new Member States since 2005, the European Commission is now adding around 5,000 European airline companies […]

By Alain CORMIER and Valentin BELLASSEN The Clean Development Mechanism (CDM), launched in 2001, has attracted more than 7 000 projects. Many however, did not fully deliver the emissions reductions promised in their project design documents: out of 1.8 billion of expected Certified Emissions Reductions (CER) by April 1st, 2011, only 576 million had been […]

An achievement at the Durban summit (November 28 to December 9, 2011) is the decision to extend the Kyoto Protocol after its first commitment period ends in 2012. This extension essentially allows the continuity of the existing mechanisms and tools: the Clean Development Mechanism, Joint Implementation and the registries. Further, for the first time emerging […]

By Claudine FOUCHEROT et Valentin BELLASSEN The agricultural sector accounts for 14% of global anthropogenic greenhouse gas emissions. If we also take into account carbon emissions and sequestration from upstream – production of fertilisers, deforestation, etc. – and downstream – bio-energies, etc. – the share rises to 30%. Many practices and technologies enable agriculture’s impact […]

The final rules for the Californian allowance trading scheme initiative, which was agreed in December 2010, were voted on October 20th 2011. As from 2013, this new carbon market, which covers 85% of Californian emissions, is expected to enable the State to return to its 1990 emissions level by 2020. It will be a life-size […]

Bismarck’s dictum – “Russians harness their horses slowly, but ride fast” – applies well to the recent developments on the Russian Joint Implementation scene. After several years of skidding, Joint Implementation in Russia recently took off in terms of new project registrations and ERU issuances thanks to political support from President Medvedev that arrived unexpectedly […]

By Amadou KEBE, Valentin BELLASSEN and Alexia LESEUR Local authorities (regions, departments, metropolitan areas and towns) are increasingly involved in defining and implementing policies to combat climate change. This is not a simple task, as beyond emissions generated by their administrative services, most greenhouse gas (GHG) emissions in their territorial jurisdiction are beyond their direct […]

The disaster in Fukushima on March 11th 2011 led to a renewed questioning on nuclear power in a number of European countries, including Germany. On July 8th, the German Parliament approved the shutdown of all of the country’s nuclear reactors by 2022. Given that nuclear electricity generation does not emit any CO2, we expect this […]

By Anaïs DELBOSC, Nicolas STEPHAN, Valentin BELLASSEN, Alain CORMIER et Benoît LEGUET The purpose of this document is to estimate the supply and potential demand as regards Kyoto carbon credits (CER and ERU) up to 2020. Two distinct periods have been pinpointed: 2008-2012, the first commitment period of the Kyoto Protocol, and 2013-2020, the phase […]

China, as a non-Annex I country, has no mandatory GHG emissions reduction target under the UN Framework Convention on Climate Change (UNFCCC). Now the biggest GHG emitter in the world, China is showing increasing willingness to bear a share of the global emissions reduction effort. In this context, its 12th five-year plan (FYP) was eagerly […]

In March 2011 the UK Government began implementing a carbon “price floor” for domestic power generators, which will apply from April 2013. Since the policy will effectively create two different prices for CO2 within the European Union Emissions Trading Scheme, it will have distortionary impacts on the European carbon market. Our analysis suggests that it […]

Medium-term (i.e. pre-2015) demand for credits from the EU ETS and secondary sources of demand appears to be limited to 1.6 billion tCO2e. The supply of Kyoto credits is relatively predictable, and will cover demand between now and 2013-2014 according to our base-case scenario. Our view is that the demand-supply equilibrium will lead to a […]