Show simple item record

dc.contributor.authorNewbery, D.
dc.contributor.authorReiner, D.
dc.contributor.authorRitz, Robert
dc.date.accessioned2018-06-22T11:12:39Z
dc.date.available2018-06-22T11:12:39Z
dc.date.issued2018-06-15
dc.identifier.otherCWPE1833
dc.identifier.urihttps://www.repository.cam.ac.uk/handle/1810/277385
dc.description.abstractThe EU carbon price lies well below estimates of the social cost of carbon and “target-consistent” carbon prices needed to deliver ambitious targets such as the 40% reduction target for 2030. In light of this, the UK introduced a carbon price floor (CPF) for its electricity sector in 2013 and the new Dutch Government has recently made a similar commitment, while successive French Governments have called for an EU-wide CPF. This paper analyzes the impacts and design of a power-sector CPF, both at the EU and national level, using a political-economy approach. We find a good case for introducing such a price-based instrument into the EU ETS. We suggest that a CPF should be designed to “top up” the EUA price to €25–30/tCO2, rising annually at 3–5% above inflation, at least until 2030. We argue that the new EU Market Stability Reserve enhances the value of a CPF in terms of delivering climate benefits, and discuss the potential for a regional CPF in North-West Europe. We also review international experience with price floors (and ceilings).
dc.publisherFaculty of Economics
dc.relation.ispartofseriesCambridge Working Papers in Economics
dc.rightsAll Rights Reserveden
dc.rights.urihttps://www.rioxx.net/licenses/all-rights-reserved/en
dc.subjectCarbon pricing
dc.subjectelectricity markets
dc.subjectmarket failure
dc.subjectpolicy failure
dc.subjectpolitical economy
dc.subjectprice floor
dc.titleWhen is a carbon price floor desirable?
dc.typeWorking Paper
dc.identifier.doi10.17863/CAM.24678


Files in this item

Thumbnail

This item appears in the following Collection(s)

Show simple item record