Publication
The article assesses the European Directive on CO2 emission quotas using the GEMINI-E3 model. After summarizing the Directive and briefly describing the model, we present and analyze scenarios for different potential allocation rules. While the European quota mechanism creates a single market for eligible firms, it can also cause distortions vis-à-vis other economic sectors in each country. The arrangement does yield a single carbon price for all eligible firms, but a different carbon price for other sectors—with variations from country to country. The resulting excess costs can be significant
Philippe Thalmann, Sascha Nick
Marilyne Andersen, Nazanin Rezaei Oghazi, Thomas Bernard Paul Jusselme
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