Topic Enviromental Markets

The European and German Natural Gas Market in the Short and Long Run: Report on the Finalization and Commissioning of the Nord Stream 2 Pipeline Project

In this report, the role of the Nord Stream 2 pipeline project for the German and the European natural gas market was investigated in the short run and the long run. In the short run, no supply gap can be identified that would justify the speedy finalization of construction works on the Nord Stream 2 project. In the long run, there is no need for the Nord Stream 2 pipeline due to the German and...

Coase and Cap-and-Trade: Evidence on the Independence Property from the European Carbon Market

This paper tests the independence property under the Coase Theorem in a large multinational cap-and-trade scheme for greenhouse gas emissions, the EU Emissions Trading System (EU ETS). I analyze whether emissions of power producers regulated under the EU ETS are independent from allowance allocations, leveraging a change in allocation policy for a difference-in-differences strategy. The evidence suggests ...

Coal Transitions - Part 1: A Systematic Map and Review of Case Study Learnings from Regional, National, and Local Coal Phase-Out Experiences

A rapid coal phase-out is needed to meet the goals of the Paris Agreement, but is hindered by serious challenges ranging from vested interests to the risks of social disruption. To understand how to organize a global coal phase-out, it is crucial to go beyond cost-effective climate mitigation scenarios and learn from the experience of previous coal transitions. Despite the relevance of the topic, evidence ...

Structural Supply Side Management in EU ETS: Reviewing the Market Stability Reserve

The review of the market stability reserve (MSR) is one of the key elements of the forthcoming reform of the EU ETS. This report assesses if the MSR is designed in a way that it can fulfil its pur-pose to provide sufficient supply-side flexibility under the cap. The authors discuss different op-tions for adapting and complementing the MSR parameters, such as the intake rate and thresholds for interventions, ...

Effectiveness, Spillovers, and Well-Being Effects of Driving Restriction Policies

We study the effectiveness, spillovers, and well-being effects of low emission zones in Germany, an emission-intensity-based driving restriction rapidly growing in popularity. Using regression discontinuity and group-time difference-in-differences designs, we show that previous estimates of the policy’s impact on traffic-related air pollution significantly underestimate its effectiveness. We provide ...

Effectiveness, Spillovers, and Well-Being Effects of Driving Restriction Policies

We study the effectiveness, spillovers, and well-being effects of low emission zones in Germany, an emission-intensity-based driving restriction rapidly growing in popularity. Using regression discontinuity and group-time difference-in-differences designs, we show that previous estimates of the policy’s impact on traffic-related air pollution significantly underestimate its effectiveness. We provide ...

The Impact of ECB Corporate Sector Purchases on European Green Bonds

This papers analyzes the effect of the ECB’s Corporate Sector Purchase Programme (CSPP) and the recent Pandemic Emergency Purchase Programme (PEPP) on the yields of eligible green bonds, a new but rapidly growing segment of the corporate bond market. We exploit these policy changes using a difference-in-differences strategy, with ineligible corporate green bonds issued in euro, U.S. dollars and Swedish ...

A Real Chance for Transatlantic Partnership on Climate Policy

The EU ETS to 2030 and beyond: Adjusting the Cap in Light of the 1.5°C Target and Current Energy Policies

The Paris Agreement calls on countries to pursue efforts to limit global average temperature rise to 1.5°C. We derive a 2016–2050 emission budget for the EU Emissions Trading System (EU ETS) based on cost-effectiveness criteria aimed at achieving the 1.5°C target with a 50%–66% probability, and translate it into a cap reduction path. We show that, under current ETS parameters, the vast majority of ...

'Climate Neutral' is a Lie — Abandon It as a Goal: Correspondence