Money for nothin’ and coal for free: ‘Technology neutrality’ and biomass development under the Flemish tradable green certificate scheme

Recent literature has highlighted the creation of multiple equivalences as an important factor underpinning the rise of market-based mechanisms for environmental regulation. Extending these insights into the field of renewable energy policy, this article focuses on one example of this trend – namely the principle of technology neutrality as applied under the Flemish tradable green certificate scheme – and analyzes the concrete ways in which it has shaped the evolution of the Flemish renewable energy landscape. Concretely, the article shows that technology neutrality played a key role in promoting the uptake of biomass combustion in old coal power plants in Flanders, which led to a number of undesirable outcomes and gave rise to significant opposition. Correcting these shortcomings required a number of policy interventions on the part of the Flemish government that fundamentally moved the scheme away from the principle of technology neutrality and towards a more hybrid RE support system, suggesting that the promotion of technology neutrality was fundamentally misguided. Together with similar experiences from related market-based instruments, this suggests that the promotion of technology neutrality has far-reaching implications for the environmental effectiveness of climate and energy policies. In light of the continued promotion of the principle, the article calls for full recognition of the inherent technological choices that are being made through the promotion of policies that purport to be technology-neutral.     

China’s national carbon emissions trading scheme: lessons from the pilot emission trading schemes,academic literature,and known policy details

Upon completion, China’s national emissions trading scheme (C-ETS) will be the largest carbon market in the world. Recent research has evaluated China’s seven pilot ETSs launched from 2013 on, and academic literature on design aspects of the C-ETS abounds. Yet little is known about the specific details of the upcoming C-ETS. This article combines currently understood details of China’s national carbon market with lessons learned in the pilot schemes as well as from the academic literature. Our review follows the taxonomy of Emissions Trading in Practice: A Handbook on Design and Implementation (Partnership for Market Readiness & International Carbon Action Partnership. (2016). Retrieved from www.worldbank.org): The 10 categories are: scope, cap, distribution of allowances, use of offsets, temporal flexibility, price predictability, compliance and oversight, stakeholder engagement and capacity building, linking, implementation and improvements.

Key policy insights

• Accurate emissions data is paramount for both design and implementation, and its availability dictates the scope of the C-ETS.

• The stakeholder consultative process is critical for effective design, and China is able to build on its extensive experience through the pilot ETSs.

• Current policies and positions on intensity targets and Clean Development Mechanism (CDM) credits constrain the market design of the C-ETS.

• Most critical is the nature of the cap. The currently discussed rate-based cap with ex post adjustment is risky. Instead, an absolute, mass-based emissions cap coupled with the conditional use of permits would allow China to maintain flexibility in the carbon market while ensuring a limit on CO₂ emissions.

     

Cost-effectiveness of the Baltic Sea Action Plan

The governments around the Baltic Sea have agreed on a new set of targets for nutrient load reductions. The major motive for this is new and better knowledge about the link between nutrient loads and water transparency in different parts of the sea. The Baltic Sea Action Plan (BSAP) defines target for transparency in different marine basins, the load reductions necessary to meet transparency targets and a scheme for the distribution of the abatement burden between countries adjacent to the sea.     

Applying personal carbon trading: a proposed ‘Carbon,Health and Savings System’ for British Columbia,Canada

Addressing climate change requires the synergy of technological, behavioural and market mechanisms. This article proposes a policy framework that integrates the three, deploying personal carbon trading as a key element within a policy portfolio to reduce personal carbon footprints. It draws on policy and human motivation literatures that address the behavioural changes that may be needed in the context of a long-term threat such as climate change. This proposal builds on an analysis of the British Columbia carbon tax, international examples of carbon pricing instruments and strategies for behavioural change such as social networks, loyalty management, mobile apps and gamification. Interviews were conducted with experts in financial services, energy conservation and clean technology, as well as with specialists in climate, health and taxation policy. Their input, together with a review of the theoretical literature and practical case studies, informed the proposed design of a Carbon, Health and Saving System for promoting individual engagement and collective action by linking long-term climate mitigation measures with short-term personal and social goals, including health, recreation and social reinforcement.

Policy Relevance

This article identifies areas for climate policy innovation and recommends policies that can support, promote and enable personal carbon budgeting and collective action. Although this study is focused on British Columbia, both the input provided by key opinion leaders and the proposed framework are applicable to other jurisdictions.

This policy proposal shows how personal carbon trading could work in the context of a Canadian province with an existing climate mitigation policy. It also specifies a minimum viable product approach to establishing the economic, social and technological foundations for personal carbon trading.

The Carbon, Health and Saving System identifies the technologies and stakeholders needed to implement personal carbon trading, and offers the possibility of motivating a widespread conscious human response in the event that carbon taxation proves insufficient to generate economic adaptation in a changing climate.     

Alternative climate policy pathways in the US

Although it is likely that the political–economic coalition required for implementing a federal cap-and-trade programme for GHGs in the US is now sufficiently strong, the structural impediments that have prevented its legislative passage remain impressively durable and can be expected to continue to lay waste to congressional proposals for the foreseeable future. Indeed, given the complex history of environmental policy gridlock in Washington since the early 1980s, any expectations that a cap-and-trade programme could have been realistically achieved through the traditional legislative passage in Congress are fundamentally misplaced. Building on previous research, it is argued that – as with most other forms of environmental policy in the US over the past three decades – a national carbon market is more plausible given alternative policy pathways, which if taken are capable of circumventing the Federal Congress altogether. In particular, the interaction between litigation against the federal government and the ‘rulemaking’ authority possessed by the Executive Branch provides the potential space for the current administration to unilaterally establish a model rule for a national carbon-trading programme.

Policy relevance

This article aims to contribute to American climate policy debates by re-thinking the policy mechanisms most capable of establishing a national carbon market in the US. By taking into account the array of structural factors that have prevented the legislative passage of such a programme in federal Congress, a range of alternative policy ‘pathways’ is considered that have historically allowed progressive environmental policies to endure in Washington (despite increased Congressional gridlock over the past few decades). Two specific alternative strategies and the relationship between them are assessed: the use of litigation to impose legal obligations on federal agencies to regulate effluents, and the use of executive authority to define the nature and scope of environmental regulation. The administration's current potential to unilaterally develop a model-rule for a cap-and-trade programme under the Clean Air Act is emphasized, and the political implications of such a strategy are considered.     

Tankering strategies for evading emissions trading in aviation

Which actors in the aviation sector ought to be obliged to participate in emissions trading? The European Commission opted for the aircraft operator in their proposal for a Directive. A major drawback is that non-EU aircraft operators might legally challenge their inclusion in this scheme and, if the challenge was successful, discrimination between EU and non- EU operators would undermine the scheme. An alternative would be to place an obligation on fuel suppliers to prove possession of allowances, thus avoiding discrimination. However, emissions trading can be evaded to some extent by increased refuelling beyond EU boundaries (tankering). Typical city pairs were used to analyse the conditions under which such tankering strategies are economically attractive. The analysis shows that the attractiveness of tankering depends substantially on the relationship between fuel prices and allowance prices. If the price relation as of March 2006 is taken as a basis, tankering would be attractive within a radius of up to 4,000 km especially on southbound and eastward routes. Emissions trading could, under unfavourable conditions, be evaded for up to 20% of the total fuel consumption in aviation with the help of tankering. Although this value is only a theoretical upper limit, more than 10% of fuel consumption could be affected by tankering.     

Slovenia's climate policy efforts: CO2 tax and implementation of EU ETS

Slovenia is required to reduce its greenhouse gas emissions to an average of 8% below the base year 1986 in the period 2008–2012, due to the ratification of the Kyoto Protocol in 2002. It was the first of the transition countries to implement a CO₂ tax in 1997. At the beginning of 2005, Slovenia joined other EU Member States by implementing the Emissions Trading Scheme. In contrast with other new EU Member States, Slovenia will be a net buyer of allowances. Therefore future movements on the emissions market will play an important role in the compliance costs of achieving the Kyoto target. The main purpose of this article is to present the establishment and characteristics of the first national allocation plan (NAP1) and to describe the main elements of the second national allocation plan (NAP2) for Slovenia within the EU Emissions Trading Scheme, the expected movements on the emissions allowances market in Slovenia, the expected compliance cost of achieving the Kyoto target and to present the main characteristics and efficiency of the CO₂ tax in Slovenia.     

Evaluating the Bonn—Marrakesh agreement

Abstract

This article evaluates the environmental effectiveness and economic efficiency of the Kyoto Protocol after the Bonn Agreement and the Marrakesh Accords. The US withdrawal has by far the greatest impact in reducing the environmental effectiveness, lowering the price of traded emission permits and reducing Annex I abatement costs. The decisions on sinks imply that the Annex I CO₂-equivalent emissions without the US will come out at about 1/2% below base-year level, instead of over 4% below base-year level. Without US participation, the emission permit price is estimated to be low. Therefore, banking hot air by Russia and the Ukraine is of absolute importance for the development of a viable emissions trading market, and would also enhance the environmental effectiveness of the Kyoto Protocol.     

Korea’s approach to overcoming difficulties in adopting the emission trading scheme

In this study, we aim to describe the background for design characteristics of emissions trading schemes (ETS) in developing and emerging economies, with a particular focus on the case of Korea. These countries may face unique hardships such as fierce opposition from industry sectors, the presence of a power imbalance between the Ministry of Environment (MOE) and ministries that are in charge of supporting output growth, and the absence or incomplete development of financial markets and auctioning mechanisms. To overcome these hardships, the Korean government legislated laws that defined timelines for every stage of ETS development, established a strategic governance architecture to make up the weak position of the MOE, offered strong market-stabilizing measures focused on maintaining the allowance price below a certain level, and provided support packages to make the low-carbon transition easy by compensating for losses caused by the Korea Emissions Trading Scheme (KETS). Such policy instruments that made adoption of KETS easier could be obstacles to making it efficient.

Policy relevance

In the process of adopting a cap-and-trade system, both a developing economy and an emerging economy may face unique hardships, such as strong opposition from industry sectors, the presence of a power imbalance between the Ministry of Environment (MOE) and ministries that are in charge of supporting output growth, and the absence or incomplete development of financial markets and auctioning mechanisms. To make up for the weak base of Korea’s ETS, the government legislated laws that defined timelines for every stage of the ETS development, established a strategic governance architecture to make up for the weak position of the MOE, offered strong market-stabilizing measures focused on maintaining the allowance price below a certain level, and provided support packages to make the low-carbon transition easy by compensating for losses caused by the Korea’s ETS. Korea’s experiences can be shared with other developing economies that are considering adoption of a cap-and-trade scheme.