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- W2979308818 abstract "For any emission trading system (ETS) with quantity-based endogenous supply of allowances, there exists an allowances-demand reducing policy that increases aggregate supply and thus cumulative emissions. We establish this green paradox in a general model and apply the insights to the Market Stability Reserve (MSR) in the EU ETS, implemented in 2018. We show that demand-reducing policies announced in early periods but realized in the future, such as decisions to phase out coal power, can be inverted by the new rules: they may increase cumulative emissions. We provide quantitative evidence of our result for a model disciplined on the price rise in the EU ETS that followed the introduction of the MSR. Our results point to the need for better coordination between different policies in the Green Deal proposed by the European Commission late 2019." @default.
- W2979308818 created "2019-10-18" @default.
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- W2979308818 date "2019-01-01" @default.
- W2979308818 modified "2023-09-23" @default.
- W2979308818 title "Endogenous Emission Caps Always Induce a Green Paradox" @default.
- W2979308818 hasPublicationYear "2019" @default.
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