Will Emission Trading Promote End-use Energy Efficiency and Renewable Energy Projects

Will emissions trading, as currently applied in Europe and planned elsewhere, trigger sufficient additional investments in end-use energy efficiency (EUEE) and renewable energy sources (RES) in the near-term? We narrow the discussion to analysis of currently applied emissions trading schemes, notably the EU Emissions Trading System and provide our observations related to this question. Market-based instruments (MBIs) that foster sustainability in the energy sector have been introduced to promote electricity from renewable energy sources and cut harmful emissions. Quota systems coupled with tradable green certificates have been developed and tested in several European countries and some states in the US.Another widely analysed MBI is the tradable emission allowance; the first international CO2 emissions trading system is starting in the European Union. This paper explains the concepts of emissions trading, and of the policy instruments that involve green and white certificates. It discusses the effect of emissions trading on EUEE and RES and the conditions, including design specifics that may hamper or facilitate the wider introduction of EUEE and RES projects. Finally, the paper reviews the desirability and practicality of integration of green and white certificates and their introduction in emission trading.

BERTOLDI Paolo;  REZESSY Silvia;  BURER Mary Jean; 

2006-10-25

ACEEE

JRC30969

https://publications.jrc.ec.europa.eu/repository/handle/JRC30969,