EPRG 0631

Karsten Neuhoff, Federico Ferrario, Michael Grubb, Etienne Gabel, Kim Keats

Emission projections 2008-2012 versus NAPs II

EPRG 0631 Non-Technical Summary | PDF

Also published in:

  • Neuhoff, K  (2006), “Emission projections 2008-2012 versus NAPs II”, Climate Policy, Volume: 6, Issue: 4, Pages: 395-410

Abstract: We compare the national allocation plans, proposed and submitted by EU member states as of October 2006, with our estimations for CO2 emissions by the installations covered by these NAPs. The collective allocations proposed under Phase II NAPs exceed the historic trend of emissions extrapolated forward. Using our projections we find, depending on uncertainty in fuel prices, economic growth rates, performance of the non-power sector and CDM/JI availability, a 15% chance of a ‘dead market’ with emissions below cap even at zero prices. With an expected inflow of committed CDM/JI credits of 100 MtCO2/year allowance supply will exceed demand in 50% of cases without any carbon price, and in 80% of our 20€/tCO2 scenarios. The proposed Phase II NAPs would result in low prices and only small volumes of CDM/JI would enter the EU ETS. CDM/JI would almost exclusively be public sector funded, placing the cost of Kyoto compliance entirely upon government

Keywords: Emission trading, Allocation Plan, Europe, Projections

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