The EU Commission is planning the introduction of a system for the trading of emissions in implementing the commitments set by the Kyoto Protocol. The draft directive allows the individual states a considerable amount of decision-making leeway regarding the criteria for the allotment of CO2-certificates (allocation plans) for firms. On the one hand, this allows to take into account national branch-specific particularities as well as already realised investments in climate protection. On the other hand, there exists the danger of competitive distortion in favouring or discriminating against different branches.

The chances and risks of the proposed EU-Directive for a pan-European trade of CO2-Emmission rights will be discussed in this project. In particular potential problems caused by the still missing appropriation or harmonisation of an EU-wide implementation will be examined. In addition to a qualitative discussion of the varied rules for allocation, the project will quantify the respective economic effects with the help of simulation calculations. The plans can thereby be compared concerning important economic-political criteria, such as cost-effectiveness and cost for sectoral adaptation. Based upon this, economic policy suggestions for action can be derived. An additional component of the analysis is how the EU Directive adapts to the previous system of regulation (ecological taxation or voluntary self-obligation).

Selected Publications

Discussion and Working Papers