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The topic I'm covering in my policy brief is the European emission trading
system, the ETS.
In 2013 we will enter the third phase
of this ETS and there will be significant changes compared to the
first and second phase.
The most important issue will be that
the rules of allocating
emission allowances will be drastically changed and this has
fueled fears by member states that they will be worse off.
So what I am analyzing in my policy brief is whether
some member states will be adversely affected and what
in total the redistribution effects of the emission trading scheme are
and how
the ETS is going to compensate those member states most
affected.
The issue is that
the economic effects are quite
complex so
there are many different drivers that affect the
economic situations very differently in different countries so the initial conditions
of each country play a huge role for the economic effectiveness by
the ETS
and furthermore
the
allocation of allowances and of option
revenues.
Also follows for us complex structures and
we try to approach this
complex interaction by separating out different economic effects.
In the policy brief
we therefore develop
several indicators for
why a country is affected by the ETS and we compare all these
indicators for each country always with the EU and we manage
to find out
which countries are over proportionally affected and which countries are less
affected.
So
the central and eastern european countries are
not disadvantaged by the emission trading system
as there are several compensation mechanisms inside the ETS. And in conclusion
we find no clear evidence that any country is worse off by the European emission
trading system
and we think that all countires are quite well compensated by the system
therefore our policy recommendations is not to touch the emission
trading system in order to improve the level
of compensation of any country.