EU Emissions Trading Scheme as Implemented in the Czech Republic

T. Chmelík, P. Zámyslický

Abstract


The paper reports on the implementation of the European Emissions Trading Scheme (EU ETS) in the Czech Republic. Trading in CO2 emission allowances is one of the most dynamic and progressive economic instruments of environmental policy. Since coming into force in January 2005, the system has incorporated into company decision making a truly new phenomenon – the price of carbon in the form of allowances tradable on the European market, where the price of the allowance represents the costs of a company when emitting one ton of CO2. The incentive, given by the opportunity costs should motivate operators of installations emitting CO2 to analyze options for carbon emission reduction and to behave rationally. In total, the system should result in a quite significant reduction in the compliance costs of CO2 reduction when compared to alternatives such as taxes or emission limits, as a result of flexibility given by the market.
The most controversial and sensitive part of the system is the initial distribution of the allowances to emitters. The so-called National Allocation Plan has to provide answers to very difficult questions – to whom, how and how many allowances will be given. This paper focuses on a detailed description of the sectors and companies in the Czech Republic that are affected by the system and discusses various aspects of the scheme.

Keywords


EU Emissions Trading Scheme (EU ETS); National Allocation Plan (NAP); allowances; industry

Full Text: PDF

Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

ISSN 1210-2709 (Print)
ISSN 1805-2363 (Online)
Published by the Czech Technical University in Prague