Climate change policy

We analyse policy options, their past performance and potential future impacts using analytic and numeric models, empirical evidence and broader stakeholder and literature surveys. This aims to contribute to the evidence base informing policy makers and industry.

Our research in this area

Emissions trading schemes are one of the main tools used for climate change policy. The European Union Emissions Trading Scheme (EU ETS) is the main focus of our research, which investigates the role of carbon pricing for investment, operation and consumption choices.

Our research in this sector

Policy overview

This research focuses on the policy framework underpinning and overarching emission trading schemes. Carbon pricing and emissions trading schemes are now key tools in climate policy frameworks; analysis of the current structures and frameworks and the future development for such schemes is covered below.

Projects and workshops

To inform the discussion of EU ETS design post-2012, we conducted roundtables with academic, policy, industry and NGO participants:

  • Submission to EU ETS Review
  • Final Workshop to Address Competitiveness Concerns
  • Roundtable 1: Sectoral Agreements and Output-based Allocation
  • Roundtable 2: Consistency of ETS
  • Roundtable 3: Impact of CO2 Price Uncertainty on Investment Decisions
  • Roundtable 4: Model Comparison Workshop

Free allowance allocation

The allocation of allowances to firms operating within the European Emissions Trading Scheme is a fundamental political issue, influencing the effectiveness and impact of such schemes. Our research analyses the impact of National Allocation Plans and the use of free allowance allocation to alleviate competitiveness concerns.

Projects and workshops

Project info

Combining efforts of an international team of experts, the available Second Phase National Allocation Plans are evaluated against detailed criteria.

Our objective is to facilitate easy evaluation and comparison of Second Phase NAPs. The information and data are extracted from official sources and documents, and presented in the tables below.

The scope of analysis also includes calculations of the volume of allowances allocated to a standard sample power plant (existing and new entrant) under each Second Phase NAPs.

Disclaimer

The tables in this file are the result of an ongoing joint effort of an international group of researchers and experts. Whilst caution has been taken on the accuracy of information contained inside tables, it should be emphasised that this is a work in progress.

Citation

The working paper “Comparison of National Allocation Plans for the Period 2008-2012” by Neuhoff et al. contains much of the core analysis and policy implications arising from this comparative exercise.

To comment, contribute or for more information please email [email protected].

Likely NAP IIs – analysis following CEC decisions on 29 November

The EU Commission announced on 29 November decisions on 10 second phase NAPs submitted by Member States. In the table presented in the Excel File) we apply the methodology of the commission,  as presented in their decision on the first 10 NAPs, to all member states. If the same methodology is be applied across all Member States, then this would result in a 200 Mt/year reduction.

Auctions

The EU ETS is moving towards greater auctioning of allowances. Our research focuses on the design of such auctions and the impacts of auctioning.

Projects and workshops

Summary

The Electricity Policy Research Group (EPRG) hosted a one-day workshop at the University of Cambridge on 12 January 2007, which was designed to address the economic and technical issues relating to auctions for CO2 allowances in the European Emissions Trading Scheme. The workshop was underwritten by Climate Strategies and contributes to the research programme of the EPRG.

The programme comprised short presentations and discussion, involving all delegates to identify areas of shared understanding and aspects that require further analysis or discussion. Participation was by invitation only. 26 delegates attended, of which 15 were from academic, 4 policy and 7 business backgrounds. The workshop was conducted under the Chatham House Rule.

The workshop addressed the following themes:

  • auction format
  • impact on investment certainty
  • impact on prices level (strategic effects)
  • revenue recycling and competitiveness
  • coordination across Europe
  • experience from other markets
  • CO2 auction formats
  • price impacts and transaction costs
  • revenue recycling

A workshop report Auctions for CO2 Allowances – A Straw Man by Karsten Neuhoff is now available for download. Comments are welcome.

Presentations

Download PDF files of the programme and presentations:

Leakage and instruments to address leakage

  • Leakage of carbon emissions.
  • Competitiveness issues relating to trading schemes.
  • Border tax adjustments as instruments to reduce competitiveness concerns.

Role of carbon prices

The role that carbon prices can play in climate change policy and social decision making.

Investment response to carbon prices

Investment responses in the energy industry from carbon prices.

International and non-CO2 experience

Use of trading schemes internationally and for other emissions, notably SO2.

Factors such as information constraints, administrative barriers and institutional differences can delay or prevent a shift towards lower carbon choices.

We investigate policies to address these factors and indicators to measure and manage their success.

Climate Change is a global issue, requiring international cooperation and engagement among countries and regions. Mitigation policy is increasingly global in scope and the Post-Kyoto framework will contain elements affecting all countries. Our research discusses the design and implementation of international engagement frameworks.

International Support for Domestic Climate Policies (ISDCP)

Following a kick-off workshop in May, this project develops 6 country case studies and 5 discussion papers on international support for domestic climate policy. The country studies focus on domestic climate policies in China, India, Brazil, South Africa, Hungary, and Ghana. While several institutional papers address international incentive schemes and compliance mechanisms, policy targets and metrics, and the role of domestic policies for technology transfer.

Download the Policy Summary and Executive Summary.

The first part of the project provides 6 case studies of 6 policies and actions with climate co-benefits in developing countries, analyses their supporters and barriers, and explores how international support could improve the speed or scope of their implementation.

Country case studies

The second part of the project reviews mechanisms and institutional arrangements that can facilitate such international cooperation, building on experience in other policy areas:

Institutional papers

Projects and workshops

On 26-27 May 2008 we hosted a kick-off workshop for the projected which we convened with the organisation Climate Strategies. We addressed the following themes and experiences in relation to domestic climate policy:

  • Barriers for implementation and enforcement: Sector and country case studies.
  • International resources to support domestic policy: Policy based development and the EU enlargement process.
  • Institutional setting of cooperation: Multilateral and bilateral frameworks for cooperation.
  • Frameworks to link policy to money: Large-scale joint ventures and market mechanisms.
Summary

The workshop explored other options to support mitigation policies in developing countries through North-South cooperation arrangements. Particular attention was given to discussions on bilateral/multilateral governance and financing structures, and their ability to support far-reaching domestic policies in the South.

Representatives from India, Ghana, China and Brazil presented papers on country-level developments in different sectors, the implementation barriers faced, and potential opportunities. This was followed by presentations on participatory experiences from Hungary’s EU Enlargement process, GTZ’s bilateral policy-based development, the multilateral framework of the UNFCCC Clean Development Mechanism Executive Board, and the emerging EU–China bilateral cooperation. The second day was devoted to an open discussion of new ideas about how to take forward the joint responsibility for climate policy.

‘International Public Finance to Support North-South Cooperation on Domestic Climate Policy’, by Karsten Neuhoff, June 2008:

Day 1: Monday 26 May 2008, University of Cambridge

Welcome

  • Bernhard Schlamadinger, Climate Strategies. Welcome and background.
  • Karsten Neuhoff, EPRG, Cambridge.      The structure of the workshop

Session 1: Experience with barriers for implementation and enforcement of effective domestic climate policy

  • Chair: Bernhard Schlamadinger
  • Anoop Singh, IIT Kanpur, India. Perspectives from the Indian Power and Steel Sector.
  • William Gboney, City University, London. Land use in Ghana.
  • Xiliang Zhang, Tsinghua University, Beijing. The Energy Sector in China.
  • HaroldoMachado Filho, Ministry of Science and Technology of Brazil. The Transport Sector in Brazil.

Session 2: Experience with international resources to support domestic policy

  • Chair: Michael Grubb
  • Zsuzsanna  Pato, REKK, Budapest. EU Enlargement and Domestic Climate Policy.
  • Lorenz  Petersen, GTZ, Germany.Policy Based Development.
  • Karsten Neuhoff, EPRG, Cambridge.  Summary of Literature on Policy Cooperation.

Session 3: Experience with institutional setting of cooperation

  • Chair:Benito Mueller
  • Hans-Juergen Stehr, Copenhagen Business School, Copenhagen. Multilateral Experience from the CDM Executive Board.
  • Bernice Lee, Chatham House, London. International Frameworks for Bilateral Cooperation.

Session 4: Frameworks to link policy to money

  • Chair:Felix Matthes
  • Emmanuel Geurin, IDDRI, Paris. AAU Trading and No-Lose Targets.
  • David Robinson, Oxford Institute for Energy Studies, Oxford. Joint Responsibility and Large Scale Joint Ventures.
  • Thomas Heller, Stanford Law School, Stanford. Comments on International Frameworks.

Day 2: Tuesday 27 May 2008, University of Cambridge

Session 5: Summary of the previous day

  • Chair: Felix Matthes
  • Summary of perspectives from previous day from: Karsten Neuhoff, Bentio Mueller, Xiliang Zhang, and Anoop Singh.
  • Questions and Discussion.

Session 6: What could a North-South cooperation look like?

  • Chair: Bentio Mueller
  • Experience from previous governance structures discussed.
  • Barriers for cooperation and policy frameworks outlined.

Session 7: Next steps

  • Chair: Karsten Neuhoff
  • Possible collaboration efforts and timeframes considered.
  • Papers and research agenda proposed.

International Support for Domestic Action (IDSA)

The workshop links a discussion of results from the 2008 project “International Support for Domestic Climate Policy”  (ISDCP) with presentations and comparisons of recent concepts for technology cooperation. The workshop will result in a report on

Projects and workshops

The workshop links a discussion of results from the 2008 project “International Support for Domestic Climate Policy” (ISDCP) with presentations and comparisons of recent concepts for technology cooperation. The workshop will result in a report on technology linkages, and refine the research agenda for the 6-month project International Support for Domestic Action (ISDA) for 2009.

Download a report from the 2-day workshop.

Monday 9 February 2009, Queens’ College, Cambridge

Session 1:  Workshop overview, link to UNFCCC discussion and outline of projects
Chair: Dora Fazekas

Session 2a and 2b: Country policy case studies
Chair: Barbara Buchner

  • William Gboney, Institute of Infrastructural Economics and Management, Ghana: Ghana case study
  • Xiliang Zhang,  Tsinghua University, Beijing: China case study
  • Anoop Singh, IIT Kanpur, India. India case study
  • Andrew Marquard, University of Cape Town, South Africa: South Africa case study
  • Haroldo Machado-Filho, Ministry of Science and Technology of Brazil: Brazil case study

Session 3: Methodology for effective policy implementation
Chair: Michael Grubb

Tuesday 10 February 2009: Queens’ College, Cambridge

Session 1a: Technology transfer dimensions
Chair: Anoop Singh

Session 1b: Technology transfer dimensions

Session 2:Ho w to feed into international process and international institutional anchoring
Chair: Haraldo Machado-Filho

  • Getting started: do the approaches we have identified fill demands identified in country policy studies
  • What is required for UNFCCC process? How do we have to structure/time the work to be helpful?
  • What options exist for early experience? What other international cooperation/process should be considered?

Session 3: Project design – International Support for Domestic Action (ISDA)
Chair: Karsten Neuhoff

  • Discuss structure of policy case studies. Links between case studies / south-south cooperation.
  • Design and timing of stakeholder workshops. Outreach events scheduled.
  • Format of final report, project management / governance. Time line.

Download the full agenda.

To provide input for ISDA project, country study workshops addressing developing country priorities will be held during April and May 2009. The workshops aim to discuss domestic barriers, how can success of  domestic action can be managed and measured, and what type of international support mechanisms can enhance scale, scope and speed of implementation?

The workshops are part of the project ISDCP phase II – which aims to address 3 objectives by July 2009:

  • Explore the details of and perspectives on domestic implementation of policies with climate co-benefits using a bottom-up approach, including assessment of the necessary policy indicators for intermediary outcomes.
  • Evaluate different options for institutional settings to provide international support for technology development and transfer, including technical assistance, technology cooperation and financial transfers.
  • Identify opportunities to anchor the approach in the UNFCCC negotiation process combining the resources discussed under the finance track with the institutional cooperation emerging under the technology track. Particular attention will be given to a Monitoring-Reporting and Verification (MRV) approach.

Ghana Country Study Workshop – April 2009

The Ghana workshop was held in Accra, Ghana, on 8 April 2009, and summarised discussions on climate change impact, and international support for renewable energy and energy efficiency technology transfer, at the workshop.

Download a workshop report by William Gboney: International Support to promote technology transfer and deployment, for renewable energy and energy efficiency in Ghana.

  • Oppong-Boadi Kyekyeku, Principal Programme Officer, Energy Resources and Climate Change Unit: Environmental Protection Agency: Climate Change Impacts in Ghana
  • William Gboney, International Institute of Infrastructural Economics and management (I3EM): International support to promote technology transfer and deployment for renewable energy and efficiency
  • Karsten Neuhoff, Electricity Policy Research Group: International Support for Domestic Action
  • Wisdom Ahiataku-Togobo, Ministry of Energy: Climate Change Mitigation – The Role of Renewable Energy

Brazil Country Study Workshop – May 2009

The Brazil workshop was held in Rio de Janeiro, on 18 May 2009, and summarised discussions on climate change impact, and international support for policy cooperation and technology transfer.

During the workshop participants were asked to discuss within groups questions related to the kind or categories of measures or actions that should be used to accelerate the modal integration or transfer in freight transport. View an example of the survey used at the workshop to facilitate discussions.

South Africa Country Study Workshop – May 2009

The South Africa workshop was held in Cape Town, South Africa, on 22 May 2009, and summarised discussions on technology, infrastructure and  industrial challenges for climate change.

Download a workshop report by Max Edkins.

India Country Study Workshop – May 2009

The India workshop was held in New Delhi on 25 May 2009, and summarised discussions on climate co-benefits and the Indian power sector.

During the workshop initial results from the second phase of the Climate Strategies International Support for Domestic Action project were presented; including country studies on domestic policies, analysis of the role of policy indicators; and international support mechanisms.

Workshop Agenda

Workshop presentations, 5 June 2009, GTZ Bonn

Heleen de Coninck: International Technology Support Mechanisms

Karsten Neuhoff: The Role of Indicators for Effective Policy Implementation

Country study presentations

William Gboney: Policy and Regulatory Framework for Renewable Energy and Energy Efficiency in Ghana: Enhancing Technology Transfer

Xiliang Zhang: China’s Wind Industry: Lessons for Domestic Policy Interventions and International Support

Anoop Singh: Climate Co-Benefit Policies in the Indian Power Sector – Drivers, Actors and Barriers

Max Edkins: Large-Scale Rollout of Concentrated Solar Power in South Africa

Marcia Valle Real: Policy Implementation for Low-Carbon Freight and International Support Options in Brazil

UNFCCC Side Event, Saturday 6 June, Hotel Maritim Bonn

Presentation –  International Support for Domestic Climate Action in Developing Countries

In connection with the workshop, initial results from the project were presented in a Side Event during the UNFCCC Bonn Climate Change talks. The presentation summarised country case study work, international support mechanisms for developing countries, and discussed the role of indicators for monitoring, reporting and verification (MRV).

It has become clear that defining emission targets alone will not suffice to guide cooperation with developing countries. Cooperation on technology, capacity building, and direct provision of financial support is receiving increasing attention. This has raised the question of which indicators can be used to measure such activities.

So far, CO2 emissions measurements are the only quantitative indicators required under the UN framework convention on Climate Change. But obviously many other indicators using measurements of qualitative and quantitative data are possible. A wide range of indicators are used across different sectors and organisations. The question is, what can we learn from these experiences in other fields for the design of a UN framework and specific mechanisms for climate cooperation?

Could you please complete the attached survey and share some of your experiences with the  design, collection or use of indicators? The survey can be returned as word doc, paper or fax or answered online.

This work is part of our current project, International Support for Domestic Action, and the data will be shared with all participants.

Download the survey

Also the ISDA Project Outcomes – 2009 project.

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