Beyond Control: Policy Incoherence of the EU Emissions Trading System
نویسندگان
چکیده
In this article, we explain why the current climate policy mix of European Union (EU), consisting EU Emissions Trading System (ETS) and overlapping policies, is incoherent with respect to emission abatement cost-effectiveness. The concept coherence guides our analysis in identifying ETS’ dynamic supply adjustment mechanism, Market Stability Reserve (MSR), be at heart shortcomings market design. Incoherence emerges due MSR’s quantity-based indicator for scarcity. It only works well past demand fluctuations, but not anticipated changes demand, e.g., caused by a member state’s fossil-fuel phase-out. As result, instead fostering synergies as intended, MSR undermines creating backfiring interactions making precise predictions policies’ impacts close impossible. Considering Commission’s reform proposal July 2021, argue that change parametrisation leaves fundamental cause incoherence unaddressed. Based on recent findings economics literature, propose introducing price-based scarcity solution substantially reduce mix.
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ژورنال
عنوان ژورنال: Politics and Governance
سال: 2022
ISSN: ['2183-2463']
DOI: https://doi.org/10.17645/pag.v10i1.4797