Climate | Policy Brief
Linking emissions trading systems with different price control mechanisms
04 December 2020
Most existing Emissions Trading Systems (ETSs) include their own specific Price Control Mechanism (PCM): a design feature which steers the allowance price into a desired range. Divergences along five key dimensions of PCMs may impact linking between ETSs in several ways, positive or negative. Restricted linking, e.g. exchange ratios or import quotas on allowances, could mitigate adverse effects of PCM differences between prospective partners. Convergence towards soft and price-based PCMs is both desirable and likely difficult to accomplish. PCMs may increase allocative efficiency if they make the allowance supply more responsive to shocks. The most effective way to reduce long term price uncertainty remains creating an environmentally ambitious climate policy framework.
logo cadmus Read it on Cadmus Download in open access

LATEST FSR PUBLICATIONS

Other
In 2022, we experienced an unprecedented energy crisis. Governments intervened to help consumers pay their bills and to apply revenue claw-back mechanisms on utilities. ACER identified a total of 400 [...]
Other
If estimates and targets are to be believed, roughly 6 to 10 million tonnes of hydrogen will be imported into the EU every year by the end of the decade, [...]
Other
The Performance Review Commission (PRC) is an independent body supported by EUROCONTROL with a remit to review and report on the performance of European air traffic management (ATM). While performance [...]
Technical Report
As stated by the OECD, “water security in many regions will continue to deteriorate due to increasing water demand, water stress and water pollution.” Indeed water supply and sanitation (WSS) [...]
Other
Electricity is used for railway traction. With the 4th Railway Package, traction current became excluded from the Minimum Access Package to be provided by the Infrastructure Managers (IMs) and was [...]

Join our community

To meet, discuss and learn in the channel that suits you best.

scroll

top