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A flexible CO2 targeting regime

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Author

Summary, in English

According to EU regulations, CO2 emissions capped by the EU emission trading system must decline by 1.74 percent per year from 2013 and onwards. This paper argues that it is necessary to allow short term fluctuations in emissions in order to avoid unnecessary volatility in the real economy. An analysis of emissions data from the European Union and the United States reveals systematic fluctuations of some +/- 5 percent a year around the long run trend. Hence, the Emission Trading System (ETS) should be modified to better accommodate temporary variations in emissions.

Publishing year

2011

Language

English

Pages

297-308

Publication/Series

Economics Bulletin

Volume

31

Issue

1

Document type

Journal article (letter)

Publisher

Economics Bulletin

Topic

  • Economics

Keywords

  • CO2
  • flexible policy targeting
  • policy implementation

Status

Published

ISBN/ISSN/Other

  • ISSN: 1545-2921