The EU Emissions Trading System and Climate Policy towards 2050: Real incentives to reduce emissions and drive innovation? CEPS Special Reports, 12 January 2011

With the EU Emissions Trading System (ETS) now entering in its seventh year of operation, this report takes stock of the largest multi-sector greenhouse gas trading scheme in the world. It reviews the experiences of the pilot phase from 2005-07, assesses the adjustments introduced in the second phase (2008-12) and looks ahead to the radical changes that will come into effect in the third phase starting in 2013. The assessment is based on a literature review of recently published ex-post analyses and ex-ante studies and draws as well on our own calculations. It investigates the main controversies surrounding the EU ETS, such as its environmental effectiveness, economic rents, windfall profits and fairness, the role of CDM and JI and its impact of on industrial competitiveness. It also evaluates the scheme’s ability to promote innovation and low-carbon technology deployment. Finally, the study addresses the fundamental question of whether the ETS has lived up to its promise to “promote reductions of greenhouse gas emissions in a cost-effective and economically efficient manner”, and if not, what are the prospects of its doing so in the future and what additional changes will be required

Multiplicative scale uncertainties in the unified approach for constructing confidence intervals

We have investigated how uncertainties in the estimation of the detection efficiency affect the 90% confidence intervals in the unified approach for constructing confidence intervals. The study has been conducted for experiments where the number of detected events is large and can be described by a Gaussian probability density function. We also assume the detection efficiency has a Gaussian probability density and study the range of the relative uncertainties $\sigma_\epsilon$ between 0 and 30%. We find that the confidence intervals provide proper coverage over a wide signal range and increase smoothly and continuously from the intervals that ignore scale uncertainties with a quadratic dependence on $\sigma_\epsilon$.Comment: 22 pages, 7 figures, 2 table

A review of research ethics in internet-based research

Internet-based research methods can include; on-line surveys, web page content analysis, videoconferencing for on-line focus groups and/ or interviews, analysis of ‘e’ conversations through social networking sites, email, chat rooms, discussion boards and/ or blogs. Over the last ten years an upsurge in Internet Based Research (IBR) has led to increased interest in IBR and research ethics. Here we present some ethical guidelines for IBR whilst at the same time accepting that it would be unrealistic to expect that any single set of guidelines can cover all ethical situations concerning IBR). There is simply too much diversity across internet cultures, values and modes of operation for that to be the case. Perhaps the most useful solution to the complex challenges of IRB lies with a form of ‘negotiated ethics’, a situated approach grounded in the specifics of the online community, the methodology and the research question(s). This does not mean an ‘anything goes’ relativist approach, rather an open, pluralistic policy in relation to IBR ethical issues (Ess, 2009; AoIR, 2002)

An Analysis of the EU Emission Trading Scheme

The European Union’s Emissions Trading Scheme (ETS) is the key policy instrument of the European Commission’s Climate Change Program aimed at reducing green- house gas emissions to eight percent below 1990 levels by 2012. A critically important element of the EU ETS is the establishment of a market determined price for EU allowances. This article examines the extent to which several theoretically founded factors including, energy price movements, economic growth, temperature and stock market activity determine the expected prices of the European Union CO2 allowances during the 2005 through to the 2009 period. The novel aspect of our study is that we examine the heavily traded futures instruments that have an expiry date in Phase 2 of the EU ETS. Our study adopts both static and recursive versions of the Johansen multivariate cointegration likelihood ratio test as well as a variation on this test with a view to controlling for time varying volatility effects. Our results are indicative of a new pricing regime emerging in Phase 2 of the market and point to a maturing market driven by the fundamentals. These results are valuable both for traders of EU allowances and for those policy makers seeking to improve the design of the European Union ETS.CO2 prices, EU ETS, Energy, Kyoto Protocol, Weather