Cover of publication Climate Change 38/2021 Emissions trading in pursuit of electricity decarbonisation - market structures and regulations matter
Climate | EnergyEconomy | Consumption

Emissions trading in pursuit of electricity decarbonisation - market structures and regulations matter

Synthesis report


This report assesses the role of emissions trading systems (ETS) in electricity sector decarbonization through analyses  of carbon market designs and interactions with
electricity market regulations, market structures and additional  policies. It provides a synthesis of five case studies in EU, California, South Korea, China and Mexico. The authors investigate four carbon price quality criteria (volatility, reflection of marginal abatement cost, predictability, and environmental effectiveness) and three abatement channels (clean dispatch, low-carbon investment, and demand-side response). They find that ETSs are especially effective in capitalizing on short-term abatement opportunities when embedded within liberalized electricity markets (e.g. change of merit order or fuel switching). But careful design may enhance effectiveness in hybrid electricity markets where carbon cost pass through might initially be absent. Carbon markets may also send long-term signals on fuel choices and investment decisions; however, the strength of these signals will depend on ETS design and companion policies.

Reihe
Climate Change | 38/2021
Seitenzahl
44
Erscheinungsjahr
Autor(en)
William Acworth, Ernst Kuneman, Anatole Boute, Regina Betz
Sprache
Englisch
Forschungskennzahl
3718 42 002 0
Verlag
Umweltbundesamt
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PDF ist barrierefrei
Dateigröße
1101 KB
Preis
0,00 €
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Schlagworte:
 Emission Trading  electricity markets  Regulation