The EU ETS: CO2 prices drivers during the learning experience (2005-2007)

Emilie Alberola (1) , Julien Chevallier (2) , Benoît Chèze (2)

1 Mission Climat Caisse des Dépôts
2 EconomiX - EconomiX

This chapter identifies the main price drivers of European Union Allowances (EUAs), valid for compliance under the European Union Emissions Trading Scheme (EU ETS) created in 2005 to regulate CO2 emissions of more than 10,000 high carbon-intensive installations across Member States. Based on key design features of the EU ETS, this chapter develops carbon pricing strategies based on allowances supply and demand, institutional decisions, and the influence of other energy markets and weather conditions. Finally, we discuss the likely effects on economic growth on CO2 emissions and carbon prices as a by product. The discussions developed in this chapter focus on Phase I (2005-2007) of the EU ETS, which may described as the “pilot” period for the future development of this environmental market scheme.

Mots clés: EU ETS; Cap-and-Trade Program; Climate Change Policy; CO2 Price; Energy Markets; Weather Influences; Institutional Influences; Energy Policy

Domaines: Economies et finances

Emilie Alberola, Julien Chevallier, Benoît Chèze. The EU ETS: CO2 prices drivers during the learning experience (2005-2007). 2009. ⟨halshs-00389916⟩