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This paper provides an initial analysis of the EU ETS based on the installation-level data for verified emissions and allowance allocations in the first trading year. Those data, released on May 15, 2006, and subsequent updates revealed that CO2 emissions were about 4% lower than the allocated allowances. The main objective of the paper is to shed light on the extent to which over-allocation and abatement have taken place in 2005. We propose a measure by which over-allocation can be judged and provide estimates of abatement based on emissions data and indicators of economic activity as well as trends in energy and carbon intensity. Finally, we discuss the insights and implications that emerge from this tentative assessment.

The aim of this paper is to describe and discuss the weak and strong sustainability approach of assessing climate change and to show reasonable applications, weaknesses, possible improvements and linkages of both approaches. Main features of “weak” and “strong” sustainability approaches are characterised. Damage cost studies of global warming representing weak sustainability indicators are discussed. Further, the examples of the “inverse scenario” approach of the German Advisory Council on Global Change (WBGU) and the environmental space concept of the Dutch Advisory Council for Research on Nature and Environment (RMNO) are described and discussed for illustrating advantages and weaknesses of strong sustainability indicators. Finally, the integration of damage cost modules into a broader methodological framework of strong sustainability is recommended.

This paper provides empirical evidence on delinking and Environmental Kuznets Curve (EKC) for municipal waste production in Italy. First, methodological issues and literature on delinking and EKC for waste are critically re-examined. Secondly, we analyse two very disaggregated panel datasets on Italian Regions and Provinces (1996-2004 data for the 20 regions, 2000-2004 data for the 103 provinces) to estimate the extent to which delinking between waste production and economic drivers is taking place. The empirical analysis of different specifications shows mixed evidence in favour of an EKC relationship. Evidence supporting an EKC hypothesis significantly arises at a provincial level, which presents a very high data heterogeneity. Nevertheless, the turning point is at very high levels of added value per capita (around 23,000-26,000€), which characterise a very limited number of wealthy (Northern) Italian provinces. The analysis does not reveal a similar evidence for the regional dataset: only a relative delinking dynamic emerges at the provincial level, we also note a positive relationship between waste production and the share of separated waste collection, which can be explained by the sharp difference in income and waste-policy performance between Northern and Southern Italy. Population density is not significant. Finally, the test on some policy proxies, i.e. the diffusion of the new waste tariff regime at the local-level and the ability of utilities to recover waste service cost, leads to the conclusion that they are not (yet) impacting waste production. To lower the turning points and to avoid an increasing gap between geographical areas, innovative (market based) and more effective policy instruments should be implemented. In particular, the weight of waste policies should be rebalanced towards waste prevention targets and instruments, in line with the priorities stated by the EU and Member Countries. In fact, the indirect feedback effect of good post-production waste management policies/practices on reducing waste production at a source can be weak and slow. In general, the results confirm that more geographically-disaggregated data may offer more insights with respect to cross-country datasets, also from the policy perspective.

This paper illustrates the main results of an expert elicitation survey on advanced (second and third generation) biofuel technologies. The survey focuses on eliciting probabilistic information on the future costs of advanced biofuels and on the potential role of Research, Development and Demonstration (RD&D) efforts in reducing these costs and in supporting the deployment of biofuels in Organisation for Economic Co-operation and Development (OECD) and non-OECD countries. Fifteen leading experts from different EU member states provide insights on the future potential of advanced biofuel technologies both in terms of costs and diffusion. This information results in a number of policy recommendations with respect to public RD&D strategies and is an important contribution to the integrated assessment modelling community.

This paper assesses the economic impacts of linking the EU emissions trading scheme (ETS) to emerging schemes beyond Europe in the presence of a post-Kyoto agreement in 2020. Numerical simulations with a multi-country equilibrium model of the global carbon market show that linking the European ETS induces only minor economic benefits. As trading is restricted to energy-intensive companies that are assigned high initial emissions, the major compliance burden is carried by the non-trading industries excluded from the linked ETS. In the presence of parallel government trading under a post-Kyoto Protocol, the burden of the excluded sectors can be substantially alleviated by international permit trade at the country level. However, the parallel carbon markets of linked ETS companies and post-Kyoto governments are still separated here. From an efficiency perspective, the most desirable future climate policy regime is thus represented by a joint trading system facilitating international emissions trading between ETS companies and post-Kyoto governments. While the Clean Development Mechanism is not able to attenuate the inefficiencies within linked ETS, in a parallel or joint trading regime the economy-wide access to project-based abatement options in developing countries induces large additional cost-savings.

We present a novel data set of subnational economic output, Gross Regional Product (GRP), for more than 1500 regions in 77 countries that allows us to empirically estimate historic climate impacts at different time scales. Employing annual panel models, long-difference regressions and cross-sectional regressions, we identify effects on productivity levels and productivity growth. We do not find evidence for permanent growth rate impacts but we find robust evidence that temperature affects productivity levels considerably. An increase in global mean surface temperature by about 3.5°C until the end of the century would reduce global output by 7–14% in 2100, with even higher damages in tropical and poor regions. Updating the DICE damage function with our estimates suggests that the social cost of carbon from temperature-induced productivity losses is on the order of 73–142$/tCO2 in 2020, rising to 92–181$/tCO2 in 2030. These numbers exclude non-market damages and damages from extreme weather events or sea-level rise. © 2020 The Authors

This paper shows how sustainable consumption patterns can spread within a population via processes of social learning even though a strong individual learning bias may favor environmentally harmful products. We present a model depicting how the biased transmission of different behaviors via individual and social learning influences agents' consumption behavior. The underlying learning biases can be traced back to evolved cognitive dispositions. Challenging the vision of a permanent transition toward sustainability, we argue that "green" consumption patterns are not self-reinforcing and cannot be locked in permanently.

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Price floors in greenhouse gas emissions trading schemes can guarantee minimum abatement efforts if prices are lower than expected, and they can help manage cost uncertainty, possibly as complements to price ceilings. Provisions for price floors are found in several recent legislative proposals for emissions trading. Implementation however has potential pitfalls. Possible mechanisms are government commitments to buy back permits, a reserve price at auction, or an extra fee or tax on acquittal of emissions permits. Our analysis of these alternatives shows that the fee approach has budgetary advantages and is more compatible with international permit trading than the alternatives. It can also be used to implement more general hybrid approaches to emissions pricing.