Allocation of allowances. Methods and approaches（分配津贴。）.pdfVIP

Allocation of allowances. Methods and approaches Partnership for Market Readiness (PMR) Technical Workshop: Domestic Emissions Trading (ETS) Dr. Felix Chr. Matthes (孟斐) Shenzen / 深圳, 13 March 2012 Disclaimer • The views and opinions presented in this paper are partly based on results from research commissioned by the German Federal Ministry for the Environment, Nature Protection and Reactor Safety, the German Federal Environment Agency and the European Commission. • The contents of this presentation does not necessarily reflect any official position of Germany or the European Union. Allocation with an GHG ETS Introduction • Allocation: initial distribution of emission allowances • For all GHG ETS allocation emerged as the key (political) debate • Allocation is a distributional issue  distributional issues drive policy making processes  the nature of distributional issues changes over time • Underlying motivations for different allocation approaches change over time • Allocation can also have an impact on the efficiency of an ETS  for multi-period schemes with updated allocation  for schemes with new entrant allocation • Allocation must reflect other design features (coverage, scope, permitting etc.) Allocation with an GHG ETS General design options • General allocation options  free allocation • grandfathering (based on emissions) • benchmarking (based on activities)  auctions and sales • (Free) allocation to …  incumbents  new entrants • Eligible entities for (free) allocation  ETS-regulated entities  consumers (of regulated entities)  other entities Allocation with an GHG ETS Motivations for free allocation • Buy-in of stakeholders (especially relevant for phase-in) • Direct compensation  for regulated entities  for dow