Dóra Fazekas Carbon Market Implications for new EU - UniCredit ...

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VI. GLOSSARY - Abbreviation list - Expression Abbr. Explication Under the Kyoto Protocol, certificates from JI and the CDM are awarded only to project-based activities where emissions reductions are "additional to Additionality those that otherwise would occur". Emissions allowances distributed among greenhouse gas emitters to establish an emission trading market. The division of allowances can be Allocation AIJ done through grandfathering method and auctioning. Annex B countries 39 emissions-capped countries listed in Annex B of the Kyoto Protocol The schedule of countries which agreed to limit their own GHG emissions Annex I of the and return to levels of emissions of an earlier period. There are currently 41 UNFCCC Annex II of the Annex I signatories. UNFCCC All original OECD member countries plus the European Union UN Kyoto Protocol based allowance, a tradable unit of 1 tonne of CO2e. The assigned amount is the total amount of greenhouse gas that each Annex Assigned Amount B country is allowed to emit during the first commitment period of the Units AAU Kyoto Protocol. Allocation of greenhouse gas emissions among emitters within domestic Auctioning emissions trading scheme concerned with willingness to pay for permits. Parties to the Kyoto Protocol may bank some emissions allowances or credits (maximum limit of 2,5% of country's target) to use them in Banking subsequent commitment periods. The baseline represents forecasted emissions under a business-as-usual Baseline and (BAU) scenario, often referred to as the 'baseline scenario', i.e. expected Baseline Scenario emissions if the emission reduction activities were not implemented. A bubble is a regulatory concept whereby two or more emission sources are Bubble treated as if they were a single emission source. Burden Sharing Differentiates abatement commitments among Member States according to Agreement BSA their level of development. Business as usual scenario is a policy neutral reference case of future Business As Usual emissions, i.e. projections of future emission levels in the absence of Scenario BaU changes in current policies, economics and technology cap-and-trade system is an emissions trading system, where total emissions are limited or capped. The Kyoto Protocol is a cap and trade system in the sense that emissions from Annex B countries are capped and that excess Cap-and-trade permits might be traded Process consisting of the separation of CO2 from industrial and energy- Carbon Capture and related sources, transport to a storage location and long-term isolation from Storage CCS the atmosphere. Carbon Dioxide CO2 GWP: 1 Measurement unit used to indicate the global warming potential (GWP) of Carbon Dioxide greenhouse gases. Carbon dioxide is the reference gas against which other Equivalent Central and Eastern CO2e greenhouse gases are measured. Europe CEE New EU Member States (EU12) The certification process is the phase of a CDM or JI project when permits are issued on the basis of calculated emissions reductions and verification, Certification possibly by a third party. Certified Emission CER Tradable units generated by CDM Projects 206
Reductions Clean Development Mechanism for project-based emission reduction activities in developing countries. Certificates will be generated through the CDM from projects that Mechanism combined cycle gas CDM lead to certifiable emissions reductions that would otherwise not occur turbine technologies CCGT combined heat and power CHP Commitment Period The five-year Kyoto Protocol Commitment Period is scheduled to run from calendar year 2008 to calendar year-end 2012 To avoid over-sell and thus non-compliance with targets, Annex I Parties to Commitment Period hold a minimum level of AAUs, CERs, ERUs and/or RMUs in a Reserve commitment period reserve that cannot be traded Central Administrator programme started at January 1, 2005 according to Community EU Directive 2003/87/EC, which underline the necessity to maintain an Independent independent transaction log recording the issue, transfer and cancellation of Transaction Log CITL allowances within European Union Achievement by a Party its quantified emission limitation and reduction Compliance commitments under the Kyoto Protocol COP is the supreme body of the United Nations Framework Convention on Climate Change (UNFCCC). The Sixth Conference of the Parties under the UN Framework Convention on Climate Change (COP-6) took place in The Hague 13-24 November 2000. COP6 was formally not ended before agreement was reached at the second part of the conference (COP-6bis) in Bonn, Germany, in July 2001. COP-7 was held 29 Oct -9 Nov, 2001, in Marrakech, Morocco. COP-8 was held in New Delhi, India, in October/November 2002, COP-9 took place in December 2003 in Milan, Italy. COP-10 was held in December 2004 in Buenos Aires, Argentina COP-11 in Montreal, Canada in November/December 2005, this also was the first Meeting of the Parties to the Kyoto Protocol (MOP-1). COP -12 was held in Nairobi in November 2006. Conference of the COP -13 was in Bali in December 2007. Parties COP The last conference COP – 14 was in Poznan in December 2008. Projects within installations covered by the EU ETS can not be put forward as Joint Implementation projects because allocation of EUAs and generation Double Counting Designated of ERUs in the same installation would lead to double counting Operational Entity United States Environmental DOE Protection Agency EPA Early credits can be given for projects implemented between 2000 and 2008 Early Crediting to achieve compliance in the first commitment period Emission Reduction Binding purchase agreement signed between buyer (of CERs or ERUs) and Purchase Agreement. ERPA Emission Reduction seller Unit ERU Permits achieved through a Joint Implementation project Trading Scheme within the European Union. The first compliance phase is EU Emissions EU from 2005 to 2007, while the second compliance phase continues from 2008 Trading Scheme European CO2 Allowance / ETS to 2012. European Union EU Allowances, the tradable unit under the EU ETS. Equals 1 tonne of Allowance EUA CO2e. 207
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PhD Program in Management and Busin
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List of figures Figure 1. Optimal l
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„If you want to understand today,
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Neither the theory nor the empirica
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Table 1. Installations receiving th
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oth on national and corporate level
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1. Climate Change Regulation The fi
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approaches, activities that are not
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In Europe the United Kingdom and De
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(2) Allocating emission rights is d
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Figure 2. The cap determines the ma
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Table 5. Tradeable certificates (ba
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value, sectoral and spatial coverag
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with their quantified reduction tar
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* * * Several authors (Hahn and Sta
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EU ETS Within the context of the UN
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establishing an international marke
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(c) Allowances can also be distribu
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• ETS in New Zealand; • Volunta
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emissions trading schemes, making i
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end of the pilot phase. Since Augus
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Figure 10. Distance to burden-shari
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Early attitude of companies towards
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high quality, differentiated produc
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investments needed in the industry.
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3.2. Emission Trading in the new EU
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environmental benefits at a relativ
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well below their Kyoto target (EEA,
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lawsuits against the Commission for
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The most active countries to host J
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Figure 14. Hot air as supply for AA
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There have been three proposals on
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transparency of AAU transfers; redu
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Figure 18. Tradeable Hungarian AAU
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“Think Globally, Act Locally” I
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At the same time, this relatively f
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processes on the whole act a sink,
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directly from CO2 emissions are ess
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1.2. A Review of the Hungarian Lite
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2. Introducing the EU ETS in Hungar
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databases containing common data el
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instances where inconsistent decisi
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emissions each calendar year Non-tr
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is found to be in order, they may s
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economy to a market economy, as is
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the EU ETS. Many observers believe
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Emissions allowances to be allocate
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2005 2006 2007 Installation Alloc.
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Finance is putting much of the reve
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conclusion. It is safe to conclude
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allowance surplus, and then increas
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agent. 23 Denmark sold 2,762 thousa
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and Water prepared its proposal on
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What was the reason for this anomal
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considered a “transfer.” Apart
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When allowances are recognized as g
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provision is to be formed against t
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the model shall be supplemented wit
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Participants of the Hungarian EU ET
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program, full sets of emissions dat
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Figure 27. The Concentration of the
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Figure 30. The Hungarian EU ETS mar
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Figure 32. Positions of Hungarian E
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Figure 40 below shows the allocatio
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3.2. The Impact of the EU ETS on Hu
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interviews, that companies looked u
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neither emissions-reduction targets
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was considered, since they all obta
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spillover effect; this, however, co
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During the pilot period, Hungarian
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to comply shall have their names pu
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eact efficiently to regulations. Th
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ensuring great enough profit, it sw
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combined with an internal price tha
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Were Emissions Actually Reduced? Co
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column) and the verified emissions
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Figure 38. Hungarian reference peri
Page 155 and 156: * * * The effects of the EU ETS on
Page 157 and 158: (2) Transfer account of allowances,
Page 159 and 160: In an EU-context, Hungary held its
Page 161 and 162: installations the author spoke to w
Page 163 and 164: Companies, which were certain of th
Page 165 and 166: Figure 42. Hungarian transactions d
Page 167 and 168: phase. CITL Data The transaction da
Page 169 and 170: International Transfers The author
Page 171 and 172: Based on these numbers, it may be c
Page 173 and 174: The two right-hand side columns in
Page 175 and 176: sales, and how much was accounted f
Page 177 and 178: the CITL only contains data on wher
Page 179 and 180: approximately two-fifths of the vol
Page 181 and 182: (3) Installations that had shut dow
Page 183 and 184: production, one-fifth represented t
Page 185 and 186: IV. EXPERIENCES OF THE EU ETS PILOT
Page 187 and 188: starting in 2012, the European Unio
Page 189 and 190: originally allocated. Based on thes
Page 191 and 192: economic development rather than as
Page 193 and 194: Hungary has still to learn to opera
Page 195 and 196: Appendix I. - Questionnaire 3.c. Cl
Page 197 and 198: Had surplus but did not sell EUAs ,
Page 199 and 200: Appendix III. - Accounting Aspects
Page 201 and 202: Appendix V. - Overview and main fea
Page 203 and 204: Appendix VII. - Foreign emission al
Page 205: Hungária Cementipari Rt. 2006 HU 5
Page 209 and 210: Linking Directive from project acti
Page 211 and 212: VII. REFERENCES Ahman, M. - Burtraw
Page 213 and 214: Burtraw, D. - Palmer, K. - Bharvirk
Page 215 and 216: EEA (2006): Greenhouse gas emission
Page 217 and 218: Hahn, R. - Stavins, R. (1999): What
Page 219 and 220: Kaderják, P. (1997): Economics for
Page 221 and 222: Montero, J. P. (1997): Marketable P
Page 223 and 224: Philibert, C. (2006): Certainty ver
Page 225 and 226: Tietenberg, T. (1992): Relevant Exp
Page 227 and 228: Woerdmann, E. (2003): Developing ca
Page 229 and 230: Hungarian law - Hungarian governmen
Page 231 and 232: Oxford University Press, USA http:/
Page 233: Author’s Publications related to
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