Mission Impossible!? On the Harmonization of National Allocation Plans under the EU Emissions Trading Directive

Böhringer, Christoph ; Lange, Andreas

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URL: http://ub-madoc.bib.uni-mannheim.de/339
URN: urn:nbn:de:bsz:180-madoc-3394
Document Type: Working paper
Year of publication: 2004
The title of a journal, publication series: None
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: H21 Q58 Q50 H23 D58 ,
Subject headings (SWD): Europäische Union , Europäische Union/Richtlinien , Emission , Rechtsvereinheitlichung
Abstract: Starting in 2005, the EU will implement a CO2 emissions trading scheme. In this paper we show that the outspoken goals of economic efficiency and free allocation of allowances are incompatible with harmonized allocation rules. In general, the assignment of allowances is endogenous and differs widely across countries, thereby substantiating concerns for implicit state aid and competitive distortions. We discuss potential adjustments to the Directive in order to allow for harmonization, i.e. for identical assignment factors to similar firms located in different EU countries.
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