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

well below their Kyoto target (EEA, 2008). All new Member States were on track to meet their
Kyoto target in 2004, figure 13. shows the distance to their target in percent points below their
linear target path.
Figure 13. Distance to Kyoto Protocol target for new Member States in 2004
Source: EEA, Copenhagen, 2007
Prior to 1990, the CEEs had a type of environmental policy in the form of national quality standards
and pollution permits (Skjærseth and Wettestad, 2007). After that, however, all new environmental
policy principles were imported from Western neighbors. These countries are now undergoing
major economic and political transformation, and are considered to be benefiting from emissions
trading.
Klepper and Peterson (2004) found that new Member States would be the only countries selling
allowances, even without hot air taken into account. The authors argue that EU12 reduce the costs
of reaching the European Kyoto targets considerably with their low cost abatement opportunities.
According to Skjærseth and Wettestad (2007), the implementation of the EU ETS should provide
the EU12 with good opportunities. Gassan-zade (2003) states that EU12 benefit from participation
in the Kyoto Protocol mechanisms, either through Joint Implementation or through International
Emissions Trading. All EU12 have a surplus allowances, the amount of which is estimated between
696 to 1,356 Mt CO2e. “Low energy efficiency levels, high carbon intensity of the energy supply
and lack of renewable energy technologies make the countries with economies in transition
attractive for cost-effective GHG reduction projects under JI.” (Gassan-zade, 2003)
Reinaud (2003) argued that the inclusion of accession countries to the EU ETS would reduce the
cost of emissions trading by giving access to more cost-effective possibilities. As EU12 have
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