1887

The use of emissions trading in relation to other means of reducing emissions

A Nordic comparative study

image of The use of emissions trading in relation to other means of reducing emissions

For quite a long time the Nordic countries have had explicitly formulated climate change strategies and have used various measures intended to curb emissions. Since 1 January 2005 an emissions trading scheme is in operation within the European Union, after several years of preparation. When setting climate policies the Nordic countries must take this new instrument in to account, and try and find the right balance between emissions trading and other means of reducing emissions. This study analyzes how the Nordic countries have dealt with or plan to deal with the conditions of the EU emissions trading system and the relation to other measures to curb emissions.

English

.

Summary

This study analyzes how the Nordic countries have dealt with or plan to deal with the conditions of the EU emissions trading system (EU ETS) and the relation to other measures to curb emissions. Concerning the use of emissions trading and other instruments, there are a lot of similarities among the Nordic countries, but also some fundamental differences. Given the information available so far, Denmark and Finland will make extensive use of the EU ETS and government purchase of credits through the Kyoto mechanisms to reach their commitments in the period 2008–2012. Norway anticipates that the emissions reductions attained through domestic policies and measures will not be sufficiently large to reach the Kyoto commitment and the use of the flexible mechanisms will hence be an important part of the strategy. However, the division between the use of emissions trading and government purchase of credits through the Kyoto mechanisms is not yet decided. Sweden's use of emissions trading is still not decided, but the current national emission target does not include emission reductions using the flexible mechanisms. Iceland, finally, will not take part in the EU ETS in the period 2008–2012. So far, the introduction of the ETS has led to relatively small adjustments of existing instruments in the Nordic countries. Thus, many instruments are still used in parallel with the ETS. In the study we conclude that the large number of energy and climate policy instruments that are used in the Nordic countries may interact in a suboptimal way. This suggests that the marginal incentive to reduce greenhouse gases provided by each instrument should be assessed in a systematic economic analysis of all climate policies in use.

English

This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error