Complying with the forthcoming tightening of CO2 emission allocations in the EU may mean big bills for the industries affected. In this special issue of Climate Policy journal, leading experts examine the impacts on competitiveness and the commercial incentives available from the CO2 allowance allocations under the methodologies, and whether - and if so at what stage - the ETS itself may need to be amended. The study is multidisciplinary, combining economic, legal and policy analysis with specific studies of impacts on electricity, cement and other industrial sectors and the allocation issues. It brings together the results of research conducted over the past two year from various research centres and consultancies in Europe, and in particular, work commissioned by the Carbon Trust and Climate Strategies Network. Through these, it presents the most comprehensive and detailed set of analyses yet conducted of the impacts of allocation on competitiveness - one of the most critical issues for the sectors affected and for the operation of the ETS.

chapter 1|24 pages

Allocation and Competitiveness in the EU Emissions Trading Scheme: Policy Overview

ByMichael Grubb, Karsten Neuhoff

chapter 2|18 pages

The Impact of CO2 Emissions Trading on Firm Profits and Market Prices

ByRobin Smale, Murray Hartley, Cameron Hepburn, John Ward, Michael Grubb

chapter 3|24 pages

CO2 Cost Pass-Through and Windfall Profits in the Power Sector

ByJos Sijm, Karsten Neuhoff, Yihsu Chen

chapter 4|19 pages

Allocation, Incentives and Distortions: the Impact of EU ETS Emissions Allowance Allocations to the Electricity Sector

ByKarsten Neuhoff, Kim Keats Martinez, Misato Sato

chapter 7|24 pages

Auctioning of EU ETS Phase II Allowances: How and Why?

ByCameron Hepburn, Michael Grubb, Karsten Neuhoff, Felix Matthes, Maximilien Tse