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ESRI Discussion Paper Series No.230

“European Climate Change Policy assessed, with Particular Focus on the European Union Emissions Trading Scheme—Evolution and Key Features to 2020” (UCD)

Frank J. Convery
Heritage Trust Professor of Environmental Policy
Corrado Di Maria
Environmental Economics Unit, University College Ireland, Dublin
Barry Anderson
Environmental Economics Unit, University College Ireland, Dublin
Jurate Jaraite
Environmental Economics Unit, University College Ireland, Dublin
Abstract

In this paper, we have surveyed the effects of European climate change policy on European economies and societies, and analyzed them empirically. The paper consists of four parts. Namely, 1) a survey of ex-ante studies and ex-post literatures on the cost assessments of European Union Emissions Trading Scheme (EU-ETS), 2) a research work on subjects and prospects of development, commercialization and diffusion of the Carbon Capture and Storage (CCS), 3) Irish case study on transaction costs of firms in the EU-ETS, and 4) Irish case study on response by firms in the EU-ETS. As a conclusion, this paper proposed appropriate environmental policy process for Japan based on the studies’ results.


Structure of the whole text (PDF-Format 3 File)
full text (406KB)
PREFACE ------------------------------------------------------------------------------------------------------------------- 3  
EXECUTIVE SUMMARY -------------------------------------------------------------------------------------------------- 5  
SOME IMPLICATIONS FOR THE JAPANESE POLICY PROCESS ---------------------------------------------------- 14  
   Insights for the design and operation of a Japanese Emissions Trading Scheme (JETS) -------------------------------------- 14  
   Useful Perspectives for Modelling emissions trading markets ex ante and ex post. ------------------------------------------- 14  
   Business Opportunities and the Sectoral Approach. ------------------------------------------------------------------------ 15  
LEARNING FROM THE EX-ANTE LITERATURE ON THE EU ETS ---------------------------------------------------- 17  
   Abstract ------------------------------------------------------------------------------------------------------------------- 17  
   1. Introduction ------------------------------------------------------------------------------------------------------------- 18  
   2. Guiding definitions and concepts of models assessing costs of climate change policies ------------------------------------- 19  
   3. Ex-post costs in the EU ETS -------------------------------------------------------------------------------------------- 24  
   4. Ex-ante costs of the EU ETS -------------------------------------------------------------------------------------------- 25  
   5. Concluding lessons ------------------------------------------------------------------------------------------------------ 33  
   References ---------------------------------------------------------------------------------------------------------------- 35  
CARBON CAPTURE AND STORAGE IN EUROPE
- A PRIORITY FOR INNOVATION AND COMMERCIALISATION ---------------------------------------------------		 42 (832KB)
   Introduction --------------------------------------------------------------------------------------------------------------- 42  
   1. The global climate change challenge is very unlikely to be successfully met
     unless we succeed in capturing the carbon emitted from new (coal and gas-fired) electricity plants. -----------------------		 43  
   2. Carbon capture, transport and storage is technically feasible ------------------------------------------------------------- 47  
   3. But there are huge challenges in scaling up from the current situation to meet the overall global challenge. ----------------- 50  
   4. There are policy instruments available to the Europe to address these challenges, but they have constraints. -------------- 53 (413KB)
   5. European Policy Response has been comprehensive in attempting to address these challenges --------------------------- 55  
   6. Key issues as to whether CCS deployment will succeed. ---------------------------------------------------------------- 58  
   7. Issues for the Japan policy process ------------------------------------------------------------------------------------- 59  
   References ---------------------------------------------------------------------------------------------------------------- 59  
TRANSACTION COSTS OF FIRMS IN THE EU ETS - IRISH CASE STUDY ------------------------------------------ 60  
   Abstract ------------------------------------------------------------------------------------------------------------------- 60  
   1. Introduction ------------------------------------------------------------------------------------------------------------ 61  
   2. Environmental policy and transaction costs: theory and application ------------------------------------------------------- 62  
   3. Taxonomy of transaction costs in the EU ETS --------------------------------------------------------------------------- 65  
   4. Research Methods ----------------------------------------------------------------------------------------------------- 66  
   5. Findings ---------------------------------------------------------------------------------------------------------------- 67  
   6. Conclusions and policy implications ------------------------------------------------------------------------------------- 74  
   References ---------------------------------------------------------------------------------------------------------------- 77  
   Annex -------------------------------------------------------------------------------------------------------------------- 80  
RESPONSE BY INDUSTRY TO THE EU ETS - IRELAND CASE STUDY --------------------------------------------- 100  
   Introduction --------------------------------------------------------------------------------------------------------------- 100  
   Ireland and the EU ETS --------------------------------------------------------------------------------------------------- 100  
   Research methodology ---------------------------------------------------------------------------------------------------- 102  
   Results -------------------------------------------------------------------------------------------------------------------- 102  
ANNEX A EUROPEAN CLIMATE CHANGE AND ENERGY PACKAGE --------------------------------------------- 108  

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