Promotion of renewable energy in Baltic States

Baltic States have quite limited own energy resources. In the accession agreement with EU Lithuania, Latvia and Estonia have verified their targets to increase the share of electricity produced from renewable energy sources (RES-E) by the year 2010. Lithuania has target to increase RES-E from 3.3 to 7%, Latvia—from 42.4 to 49.3% and Estonia—from 0.2 to 5.1%. Promotion of use of renewable energy sources are among the priorities of energy policy in Baltic States. More wide use of renewable energy can make a valuable contribution to diversification of energy supply and increase of reliability of energy supply and to meeting GHG emission reduction targets. The article presents a detailed overview of the present policies and measures implemented in Baltic States aiming to support the use of renewable energy sources. The article presents a review of the present renewable situation in Baltic States and analyses policies and measures in place aiming to enhance use of renewables. The review of possibilities to use EU structural funds for the implementation of renewable energy projects in Baltic States was performed in the paper.     

Application of flexible Kyoto mechanisms for renewable energy projects in Baltic states

The article analyses the use of flexible mechanisms under the Kyoto protocol in Baltic States and investigates the perspectives of these tools in the future. The results of the first phase of joint implementation (JI)–activities implemented jointly (AIJ) in Baltic States was overviewed in the article. The stages of JI process, activities and responsible institutions necessary for the implementation of JI projects are addressed in the paper. The main aim of the analysis conducted is to assess the future perspectives for JI projects in Baltic States taking into account EU accession and implementation of EU Linking directive. The institutional structure and legal framework for the implementation of JI in Baltic States was analyzed and measures and institutions necessary for the implementation of these projects were prescribed. The experience of Testing Ground Facility in Baltic Sea Region is presented in article and recommendations for the enhancement of JI in Baltic States were developed based on analysis conducted.     

Industry lobbying and the political economy of GHG trade in the European Union

The European Union (EU) has committed itself to meet an 8% greenhouse gas (GHG) reduction target level following the Kyoto agreement. In September 2003 the EU member states has agreed on the Directive for establishing a scheme for GHG emission allowance trading within the European Union. This directive is the outcome of a policy process started by the EU Commission and its Green Paper from March 2000. The main industrial stakeholders all had the opportunity to comment on the Green Paper and from their positions we will analyse how far they are winners or losers compared to the final directive proposal. Comparing the initial Green Paper proposal (before lobbyism) to the final directive (after lobbyism) gave us a unique possibility for measuring the effect of lobbyism. Here, we find that the dominant interest groups indeed influenced the final design of an EU GHG market. This industrial rent-seeking most prominently leads to a grandfathered permit allocation rule like the one found in the US tradeable permit systems.     

Greenhouse gas emission reduction perspectives in the Baltic States in frames of EU energy and climate policy

The goal of this paper is to estimate the perspectives of the Baltic States: Estonia, Latvia and Lithuania on meeting the new European Union climate commitments, i.e., to reduce greenhouse gas emissions by 20% to the year 2020 in comparison with 1990. This ambitious target could be reached based on other EU climate and energy package commitments: increase of the share of renewables and improvement of energy efficiency as tools for fulfilling the GHG emissions reduction target.The paper gives an overview on the current situation and future plans of the Baltic States in the field of energy efficiency, consumption of renewables and reduction of GHG emissions.     

External cost of electricity generation in Baltic States

This article deals with external cost of electricity generation in Baltic States. The costs of electricity generation and distribution are the most important criteria shaping decisions within the electricity system. However, the external cost due to air pollution should also be adequately taken into account seeking to promote new and clean technologies for electricity generation. External costs of electricity generation in the main power plants burning fossil fuel were calculated based on ExternE methodology for Baltic States during EU Framework 6 project CASES. The article presents the first results of external cost of electricity generation in Baltic States.     

2012年欧盟碳市场评述

欧盟碳排放贸易体系(EU ETS)自2005年至今已运行了8年。在体系不断成熟的同时,也面临着一系列问题。本文总结了EU ETS2012年度的运行情况,回顾了年度主要政策,对存在的主要问题和经验进行了分析与总结,并为我国推进碳排放交易工作提出相关建议。     

发达国家碳排放贸易政策对比分析

《京都议定书》第17条规定附件1国家之间可以通过排放贸易帮助其实现温室气体量化减排承诺。欧盟、新西兰、澳大利亚等附件1国家还在区域、国家和地方层面制定和实施了排放贸易政策,通过设定温室气体排放配额,并允许国家、企业和个人交易这些配额来达到成本有效地控制温室气体排放的目的。但各国的排放贸易政策存在很大差别,从政策制定过程、政策的性质、排放目标的设定、排放配额的分配、排放量的测量报告和核查以及市场运行方面都存在明显的国家或区域特征,本文旨在挖掘和分析这些特征,建立对发达国家实施排放贸易这一市场手段的更深入的理解。     

Analysis of the EU policy package on climate change and renewables

In 2009 the EU decided to reduce greenhouse gas emissions at least by 20% in 2020 compared to 1990 and to supply 20% of energy needs by 2020 from renewable energy sources. This paper uses an energy model coupled with a non-CO₂ greenhouse gas model to assess the range of policy options that were debated to meet both targets. Policy options include trading of renewable targets, carbon trading in power plants and industry and the use of the Clean Development Mechanism to improve cost-efficiency. The models also examined fairness by analysing the distribution of emission reduction in the non-emission trading sector, the distribution of CO₂ allowances in the emission trading sector and the reallocation of renewable targets across Member States. The overall costs of meeting both targets range from 0.4% to 0.6% of GDP in 2020 for the EU as a whole. The redistribution mechanisms employed significantly improve fairness compared to a cost-effective solution.     

Energy indicators for sustainable development in Baltic States

This article summarises some of the results from the application of the Energy Indicators for Sustainable Development (EISD) tool for analysing trends, setting energy policy goals and monitoring progress towards these goals for Baltic States. This experience illustrates the potential applicability of the EISD methodology for energy policy development in economies in transition, using Baltic States as an example. The paper presents a summary of the analysis of six priority areas defined by EU accession requirements for new Member States and provides recommendations for sustainable energy policy development in Baltic States using this indicator approach.     

Simulating greenhouse gas (GHG) allowance cost and GHG emission reduction in Western Europe

 Due to the growing concern for global warming, the EU25 have implemented the European Union Greenhouse Gas Emission Trading Scheme (EU ETS). In the first trading period (2005–2007), part of the targeted GHG emission reductions presumably will have to result from a switch from coal fired electricity generation to gas fired electricity generation. It is possible to calculate the allowance cost necessary to switch a certain coal fired plant with a certain gas fired plant in the merit order. The allowance cost obtained is a so called switching point. When comparing historic European Union Allowance (EUA) prices (2005) with the corresponding historic switching points, the EUA prices were found high enough to cause a certain switch in the summer season. This finding leads to the use of switching points in establishing allowance cost profiles for several scenarios. A variable gas price profile is used in the simulation tool E-Simulate to simulate electricity generation and related GHG emissions in an eight zonal model representing Western Europe. Several GHG allowance cost profile scenarios are examined. For each scenario, electricity generation in the considered countries is clarified. The focus however lies on the GHG emission reduction potentials. These potentials are addressed for each scenario.     

The implications of the Kyoto project mechanisms for the deployment of renewable electricity in Europe

EU energy/environmental policy has at least two major and interrelated goals: to increase the percentage of electricity from renewable energy sources (RES-E) and to control the emission of GHG cost efficiently. These two goals could be in conflict. This paper explores one aspect of this conflicting relationship, namely the effect that the use of the Kyoto Protocol project mechanisms (CDM/JI project) may have on the deployment of RES-E within EU borders.The main conclusion is that, under certain assumptions (i.e., no mandatory EU RES-E quota), CDM/JI projects might reduce the incentive to deploy RES-E within EU borders because they would allow European power companies to comply with GHG targets in a cheaper way than if they reduced emissions by investing in renewable electricity in Europe. This is problematic, since many benefits from renewable electricity are local and these would be gone. This situation would be different if a mandatory RES-E quota (combined with an EU-wide TGC scheme) was implemented. In this case, the RES-E target would be fulfilled and CDM/JI projects would only affect RES-E deployment exceeding the target.     

Sustainable energy in Baltic States

Integration of New Member States to the European Union has created a new situation in the frame of implementation of the Lisbon strategy and EU Sustainable Development. The closure of Ignalina NPP is the biggest challenge to the energy sector development of the Baltic States. The Baltic States have quite limited own energy resources and in the Accession agreement with the EU Lithuania, Latvia and Estonia have verified their targets to increase the share of electricity produced from renewable energy sources (RES-E) by the year 2010. A wider use of renewable energy and increase of energy efficiency can make a valuable contribution to meeting the targets of sustainable development. The article presents a detailed overview of the present policies and measures implemented in the Baltic States, aiming to support the use of RES and the increase of energy efficiency. The review of possibilities to use the EU Structural Funds (SF) for the implementation of sustainable energy projects in the Baltic States was performed.The use of regional social–economic–environmental indicators is the main key to integrate sustainable energy development at the program deployment level. The indicators to be used should describe the contribution of energy programs to the sustainable development, medium- and long-term trends and inter-relationship between them and the typical energy indicators (saved toe, improved energy efficiency, percentage of RES). Municipalities may play a considerable role by promoting sustainable energy since local authorities are fulfilling their functions in the energy sector via a number of roles. The Netherlands’ example shows that municipalities may act as facilitators by implementing national environmental policy and increasing energy efficiency in an integral part of these activities. The guidelines for Lithuanian local sustainable energy development using the SF co-financing have been presented.     

CO2 emission trading within the European Union and Annex B countries: the cement industry case

The cement industry is the third largest carbon emitting industrial sector in the EU. This article presents the foreseeable technological evolution of the cement industry under business as usual circumstances, and examines the effects on the sector of carbon trading. For those purposes a global dynamic simulation model of the cement industry (CEMSIM) has been developed. The model is composed of a series of interconnected modules on cement consumption and production, international trade and capacity planning. This study quantifies the benefits achieved from emission trading in different markets (EU15, EU27 and Annex B), derived both from the revenues of emission trading, and from the lower compliance costs. The magnitude of the potential carbon leakage effect is also assessed.     

Methodology proposal for territorial distribution of greenhouse gas reduction percentages in the EU according to the strategic energy policy goal

A 20% reduction of greenhouse gas (GHG) emissions by 2020 is one of the main objectives of the European Union (EU) energy policy. However, this overall objective does not specify how it should be distributed among the Member States, according to each one’s particular characteristics. Consequently, in this article a non-linear distribution methodology with dynamic objective targets for reducing GHG emissions is proposed. The goal of this methodology is to promote debate over the weighting of these overall objectives, according to the context and characteristics of each member state. First, an analysis is conducted of the situation of greenhouse gas emissions in the reference year (1990) used by the EU for reaching its goal of reducing them by 20% by 2020, and its progress from 1990 to 2007. Then, the methodology proposed was applied for the year 2020 on two territorial aggregation levels following the EUROSTAT Nomenclature of Territorial Units for Statistics (NUTS), in the EU-15 and EU-27 member countries and on a regional level in 19 Spanish Autonomous Communities and Cities (NUTS-2). Weighting is done based on CO₂ intensity, GHG emissions per capita and GHG emissions per GDP. Finally, several recommendations are provided for the formulation of energy policies.     

Factors affecting the carbon allowance market in the US

The US carbon allowance market has different characteristic and price determination process from the EU ETS market, since emitting installations voluntarily participate in emission trading scheme. This paper examines factors affecting the US carbon allowance market. An autoregressive distributed lag model is used to examine the short- and long-run relationships between the US carbon allowance market and its determinant factors. In the long-run, the price of coal is a main factor in the determination of carbon allowance trading. In the short-run, on the other hand, the changes in crude oil and natural gas prices as well as coal price have significant effects on carbon allowance market.     

Cost effects of international trade in meeting EU renewable electricity targets

The European market for renewable electricity received a major stimulus from the adoption of the Directive on the Promotion of Renewable Electricity. The Directive specifies the indicative targets for electricity supply from renewable energy sources (RES-E) to be reached in European Union (EU) Member States in the year 2010. It also requires Member States to certify the origin of their renewable electricity production. This article presents a first EU-wide quantitative evaluation of the effects of meeting the targets, using an EU-wide system for tradable green certificates (TGC). We calculate the equilibrium price of green certificates and identify which countries are likely to export or import certificates. Cost advantages of participating in such an EU-wide trading scheme are determined for each of the Member States. Moreover, we identify which choice of technologies results in meeting targets at least costs. Results are obtained from a model that quantifies the effects of achieving the RES-E targets in the EU with and without trade. The article provides a brief insight in this model as well as the methodology that was used to specify cost potential curves for renewable electricity in each of the 15 EU Member States. Model calculations show that within the EU-wide TGC system, the total production costs of the last option needed to satisfy the overall EU RES-E target equals 9.2 eurocent/kWh. Assuming that the production price of electricity on the European power market would equal 3 eurocent/kWh in the year 2010, the indicative green certificate price equals 6.2 eurocent/kWh. We conclude that implementation of an EU-wide TGC system is a cost-efficient way of stimulating renewable electricity supply.     

欧盟碳排放贸易体系现状与分析

碳排放权贸易是通过建立合法的温室气体排放权利和总量控制目标,并允许这种权利像商品一样买入和卖出来进行排放控制。《京都议定书》规定附件1国家之间可以通过排放贸易帮助其实现量化减排承诺。欧盟、新西兰等附件1国家还建立了区域或国家层面的排放贸易体系,作为履行京都目标的主要政策措施。其中欧盟首次建立了跨国碳排放体系,取得了一定成果,成为近年来气候变化领域的政策和市场热点。     

White certificate schemes: Economic analysis and interactions with the EU ETS

This paper examines the economic, environmental and distributional impacts of an idealised tradable white certificate (TWC) scheme and shows how the impacts are modified when the scheme operates in parallel with the EU emissions trading scheme (EU ETS). It uses simple graphical techniques to assess whether a TWC scheme will increase, decrease or have an ambiguous effect on electricity demand, wholesale and retail electricity prices, carbon emissions and investment in energy efficiency, paying particular attention to the interpretation of ‘additionality’.     

GHG legislation: Lessons from Taiwan

Taiwan has drafted a Greenhouse Gas (GHG) Reduction Bill in 2006, which is currently undergoing the legislative process in the Congress. The purpose of this study is to reexamine the legal framework and contents of this Bill, evaluate potential problems and propose recommendations. This study advocates that setting the GHG reduction targets should be settled in this Bill. In addition, based on the analysis of international experiences, it is recommenced that emissions trading scheme in the Bill should be focused on large emission sources and the share of allowance auction should be increased to reduce gratis allocation. Furthermore, from the calculation results based on the long-range energy alternative planning (LEAP) model, a conflict is observed for the existing energy policy and GHG reduction efforts in Taiwan. That is, coal-burning power plants will be the most important source of energy for Taiwan in the future. In order to reduce this conflict, the authors have recommended that the Bill should also be integrated with other relevant existing legislation to achieve a complementary effect.     

Greenhouse gas emission trading schemes: a new tool for the environmental regulator's kit

As the European Union greenhouse gas emission trading scheme (ETS) is emerging, it seems interesting to look back on previous experiments and to bring together a few elements of reflection about the pertinence of ETS as a new policy tool to regulate industrial pollution. So far, several regulatory tools have been used to decrease pollution. This article focuses on two of them, command-and-control (CAC) and ETS. There is no simple answer to which one is more efficient. It depends strongly on the context. Given a few elements outlined in this paper, the choice of an ETS to abate industrial emissions of greenhouse gases in the European Union (EU) can be considered pertinent. But, ultimately, what makes a scheme environmentally efficient is not the tool in itself (ETS or CAC) but the ambition of the target. Hence the design of the National Allocation Plans setting the emission caps are of paramount importance. They will make the EU ETS either a useless mess or an effective climate change mitigation policy tool.