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A preliminary assessment of CO2 emissions abatement resulting from the implementation of the EU ETS in Italy

Panel: Panel 5. Energy efficiency in industry

Authors:
Domenico Gaudioso, ISPRA – Institute for Environmental Protection and Research, Italy
Antonio Caputo, ISPRA – Institute for Environmental Protection and Research, Italy
Chiara Arcarese, ISPRA – Institute for Environmental Protection and Research, Italy

Abstract

The environmental effectiveness of the EU ETS, i.e. its ability to provide real CO 2 emissions reductions, has often been questioned by researchers and environmental organisations. Preliminary estimates performed by Ellerman and Buchner (2006), based on installation-level data for verified emissions in the first trading year, 2005, and a range of indicators of economic activity as well as trends in energy and carbon intensity, suggest that CO 2 emissions abatement in the European Union as a whole, measured by the difference between emissions and the counterfactual, or what CO 2 emissions would have been in the absence of the EU ETS, could have been slightly over 3%. This indicates that in the absence of the EU ETS CO 2 emissions in the EU would have been 3% higher than they actually were. The objective of this paper is to provide estimates of the abatement that has taken place in Italy in the first implementation period (2005-2007) of the EU ETS. This analysis is carried out on the basis of the approach proposed by Ellerman and Buchner, with a view to understanding CO 2 emission trends at sectoral level, and to discovering possible changes in production and consumption patterns, using suitable indicators. Finally, the insights and implications that emerge from this tentative assessment are also discussed, with particular reference to the 2 nd phase of implementation (2008-2012) of the system.

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