Inclusion of Consumption in Emissions Trading

Abgeschlossenes Projekt

Abteilung

Klimapolitik

Projektleitung

Karsten Neuhoff

Projektzeitraum

1. Januar 2015 - 30. Juni 2016

Auftraggeber

Climate Strategies


Context

While the UNFCCC Lima outcome and the UNSG’s Climate Summit, among other developments, reconfirmed that pricing carbon remains a key emissions reduction tool, the focus of international negotiations has shifted from global carbon pricing mechanisms towards support for countries in their implementation of national transformation strategies, often including forms of pricing. But if countries retain flexibility in their policy mix, national carbon prices might continue to differ over longer time horizons and countries are likely to continue to implement free allowance allocation in emission trading schemes as a mechanism for leakage protection – which inevitably blunts the intended carbon price signal .

Objective

Against this background we would like to explore:

whether inclusion of domestic sales of selected energy intensive commodities (e.g. steel, cement) in domestic emission trading schemes is an effective and feasible approach towards restoring the carbon price signalalong the value chain in these sectors without damaging competitiveness.

This would build on the experience of both Korea and some Chinese pilot schemes that use a similar mechanism to re-instate a carbon price signal for electricity consumption that is muted due to electricity regulation. In these schemes, large electricity consumers have to surrender allowances proportional to electricity consumption and a benchmark rate of carbon intensity of power.



Ergänzung des Emissionshandels: Anreize für einen klimafreundlicheren Verbrauch emissionsintensiver Grundstoffe | PDF, 191.79 KB
DIW Wochenbericht 27/2016

Pricing Carbon Consumption: A Review of an Emerging Trend
DIW Discussion Papers 1620/2016

Report DE  
Eine Option für den Emissionshandel nach 2020: Einbeziehung des Konsums emissionsintensiver Materialien  
DIW Politikberatung Kompakt 111/2016

Report EN 
Inclusion of Consumption of Carbon Intensive Material in Emissions Trading  
Climate Strategies Report, May 2016

Policy Summary 
Inclusion of Consumption of Carbon Intensive Material in Emissions Trading 
Climate Strategies Policy Summary, May 2016

Legal Design and Practical Administration  
Inclusion of Consumption into Emissions Trading Systems: Legal Design and Practical Administration 
DIW Discussion Papers 1579/2016

Quantifying Impact of Inclusion of Consumption  
Quantifying Impacts of Consumption Based Charge for Carbon Intensive Materials on Products 
DIW Discussion Papers 1570/2016

Sector Analysis: Pulp and Paper  
The pulp and paper overview paper -Sector analysis for the Climate Strategies Project on Inclusion of Consumption in Carbon Pricing 
Climate Strategies Overview, May 2016

Legal Status within EU
RECIEL Journal Vol. 24 (3), 2015
http://onlinelibrary.wiley.com/doi/10.1111/reel.12131/full



This project is led jointly by Climate Strategies and DIW Berlin and delivered by a multidisciplinary, international team of researchers from a number of institutions, representing various fields (EU law and institutions, climate policy and economics, energy market and infrastructure policy and economics).

Advisory Group

Maurits Henkemans – Chair
Chang Hoon Lee, Korean Environment Institute
Carl de Mare, Karl Buttiens, Arcelor Mittal
Rob van der Meer, Heidelberg Cement
Sam Van Den Plas, WWF
Wang Yi, Institute of Policy and Management, Chinese Academy of Science

Researchers contributing to papers of the Inclusion of Consumption projects

William Acworth, DIW Berlin, Germany
Andrzej Ancygier, Hertie School of Governance, Germany
John Barrett, University of Leeds, UK
Carolyn Fischer, Resources for the Future
Manuel Haußner, University of Erlangen, Nürnberg
Roland Ismer, University of Erlangen, Nürnberg
Hanna-Liisa Kangas, Finnish Environment Institute
Yong-Gun Kim, Korea Environment Institute
Clayton Munnings, Resources for the Future
Anne Owen, University of Leeds, UK
Stefan Pauliuk, Freiburg University, Germany
Jean-Pierre Ponssard, CNRS, France
Philippe Quirion, CIRED, France
Susanna Roth, Swedish Environmental Research Institute (IVL)
Nagore Sabio, UCL Energy Institute, UK
Oliver Sartor, Institute für Sustainable Development and International Relations (IDDRI)
Misato Sato, London School of Economics, UK
Anne Schopp, DIW Berlin, Germany
Thomas Sterner, University of Gothenburg, Sweden
Richard Wood, Norwegian University of Science and Technology (NTNU)
Zhang Xiliang, Tsinghua University, China
Lars Zetterberg, Swedish Environmental Research Institute (IVL)



Over the course of the first year of the project, several workshops were held side-to-side to steering committee meetings. The following provides a list of the meetings, including links to agendas and presenations, starting with the most recent event.

24.05.2016
Brussels
Launch of IoC Report in the European Parliament Agenda
Report
22.01.2016
Berlin
Implementation details matter: Roundtable Discussion on Inclusion of Consumption  Agenda

20.11.2015
Berlin

Innovation in the Materials Sector Agenda
1./2.10.2015
Seoul, Korea
Experience with Emission Benchmarks - Options for International Coordination

Agenda

Lim, D-W. Experience with Emission Benchmarks. ETS ALLOCATION in KOREA

Matthes, F. EU and Germany's experience with ETS benchmarking

Matthes, F. The importance of carbon intensive sectors and their specific mitigation options

Morgenstern, R. U.S. Experience with ETS Benchmarking: The case of California (A.B. 32)

Neelis, M. Benchmarking in the EU ETS

Neuhoff, K. Experience with Emission Benchmarks. Options for International Coordination

Neuhoff, K. Leakage Protection options

Qing, T. Beijing Pilot ETS: Allowance Allocations, Benchmarks & Incorporation of Consumption

Ritchie, A.Benchmark development: UK and EU experience

7./8.07.2015
Beijing, China
Inclusion of Consumption for Carbon Pricing
Neuhoff, K. Inclusion of Consumption - Beijing Project Workshop

8.06.2015
Brussels

Inclusion of Consumption for Carbon Pricing - Relevance and feasibility for the pulp and paper sector

Agenda

Acworth, W. Inclusion of Consumption in Emissions Trading – an International Comparison

Ismer, R. Including Consumption – Administrative Aspects

26.01.2015
Berlin
Inclusion of Consumption in Emissions Trading - Kick-off Workshop

Agenda

Neuhoff, K. Inclusion of Consumption in ET

 

DIW Team