• Environmental and Resource Economics Review
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• v.18 no.3
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• pp.393-430
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• 2009

This study uses a computable partial-equilibrium model of the U.S. energy industry to evaluate sulfur dioxide concentrations under two environmental policies. The policies, generator-level emission caps and tradable allowances, are selected to yield identical aggregate emissions. Regional concentrations are found to vary across the two policies significantly. These variations translate into different losses for individual states, and, nationwide, to differences of hundreds of millions of dollars in aggregate health damages. Emission caps outperform allowances by $452 million. Caps favor the southwestern, south-central and southeastern states, where they deliver $840 million lower damages than the other policies, while they deliver $390 million higher damages In northern and northeastern states.

• Environmental and Resource Economics Review
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• v.32 no.3
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• pp.149-166
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• 2023

The emissions trading system, introduced to reduce greenhouse gas emissions, experienced a sharp increase in emission allowance prices during the second plan period (2018-2020), which led to an increase in the demand for smooth supply and demand of emission allowances, while suppliers anticipating a shortage of emission allowances in the future did not participate in trading. Therefore, the authority temporarily revised the guidelines to ensure that the amount of allowances carried forward is proportional to the trading volume as a market stabilization measure. Through an optimization process using a dynamic nonlinear mathematical model, this paper analyzes the impact of the government's intervention on the carryover policy on GHG emission reductions and emission allowance market prices. According to the simulation analysis results, banking regulations could cause a decline in prices during the regulation period, even though the initial policy was predicted to be adopted.

• Environmental and Resource Economics Review
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• v.19 no.4
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• pp.915-961
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• 2010

This study is concerned with health damages from $SO_2$ under different assumptions on the relationship between air concentrations and their marginal health impacts. $SO_2$ concentration profiles resulting under emission caps, and a system of tradable emission allowances are compared. Using slopes and curvatures of the health response function consistent with evidence in medical literature, emission caps are shown to lead to lower aggregate damages under all considered parameters, an advantage of $26~452 million. The benefit of emission caps over tradable allowances increases with the curvature of the response function, but falls with its slope. The advantage of emission caps in terms of environmental damages is never overturned completely for the considered functional forms. The marginal damage function would have to be steeper than what the current medical evidence suggests for price instruments to outperform emission caps in terms of aggregate damages. With other welfare consequences included-emission abatement costs, consumer and producer surpluses, and government revenue-emission caps always lead to a $3.7~4.1 billion greater measure of social welfare.

• Journal of Environmental Impact Assessment
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• v.16 no.1
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• pp.1-13
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• 2007

This study was carried out to estimate the emission reduction rates for the regional allowable emissions by special measures to achieve the target air quality in Seoul Metropolitan Area (SMA). A modeling system was designed to validate the details in enforcement regulations set up by local governments based on the current status and plans for air quality improvement. Modeling system was composed of meteorological model (MM5), emission model (SMOKE), and air quality model (CMAQ). Predicted results by this system show quiet well not only daily air pollutants concentration but also the tendencies of wind direction, wind speed and temperature. To achieve the target air quality in Seoul Metropolitan Area (SMA), emission allowances are estimated by seasons and regions. Referring to the base year 2002, it was estimated that emission reduction rates to achieve the intermediate goal in 2007 were 14.2% and 16.6% for NOx and $PM_{10}$, respectively. It was also estimated that 52% of NOx and 48% of $PM_{10}$ reductions from the base year 2002 would be required to accomplish the air quality improvement goal of 22 ppb for $NO_2$, and $40mg/m^3$ for $PM_{10}$ in year 2014. To improve $NO_2$ and $PM_{10}$ concentration through emissions reduction policies, it was found that emissions reduction for the on-road mobile sources would be the most effective in SMA.

• Environmental and Resource Economics Review
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• v.25 no.3
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• pp.377-401
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• 2016

This study analyzes how much cost the power generation and energy sector in South Korea have to bear due to the introduction of emissions trading scheme during 2016 - 2017. To this end, the data on the seventh basic plan for long-term electricity supply and demand is applied to the electricity market simulation model called M-Core, and then the model forecasts carbon dioxide emissions to compare with the free emission allowances in the first national emissions permit allocation plan. The main results are as follows. Carbon dioxide emissions are estimated to be less in 2016 but more than the free emission allowances in 2017. When the price of the allowances is changed from \10,000/ton to \20,000/ton, the cost of purchasing the allowances is ranged from \70 billion to \140 billion. Under the assumption that CO2 cost is incorporated into the variable cost, a reversal of merit order between coal and LNG generation takes place when the price of the allowances exceeds \80,000/ton.

• Environmental and Resource Economics Review
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• v.19 no.1
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• pp.23-43
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• 2010

This article compares two different auction designs for $CO_2$ emission allowances, namely uniform pricing and multiple pricing, in view of market efficiency. Experimental economic method of Buckley et al. (2004) is applied in this analysis. As a result of this analysis as expected, multiple pricing method brings out Winner's curse. It means that uniform pricing method is more efficient than multiple pricing method.

• The Korean Journal of Air & Space Law and Policy
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• v.26 no.1
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• pp.127-145
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• 2011

European Union unilaterally included the emissions from aviation activities into EU ETS on 19 November 2008 by amending Directive 2003/87/EC. According to the Directive all the emissions(mainly against the CO2) from aviation activities shall be subject to the regulation of EU ETS from 2012. For the period from 1 January 2012 to 31 December 2012, the total quantity of allowances to be allocated to aircraft operators shall be equivalent to 97% of the historical aviation emission s. From 1 January 2013, the allowances will be reduced to 95%. The allocation of allowances which may be applied by each operator with free of charge will be reduced from 85% to 82% from 1 January 2012 to 1 January 2013. Since the Directive will affect every country's airline industry more or less, the nations and international organizations respond variously. The controversial focus is that whether EU has the right to unilaterally include the emissions from international aviation activities into EU ETS. This article firstly analyzes the effect caused by EU ETS to China's airline industry, and then studies the legality of the action of EU subject to current positive international law, and finally draws the conclusion that EU enjoys no such right to unilaterally include the emissions from international aviation activities.

• Journal of Energy Engineering
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• v.16 no.1 s.49
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• pp.15-21
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• 2007

In order to solve problems of global warming, many policies and measures has been implemented in various countries. In January 2005, the European Union Emission Trading Scheme officially started. In order to take it into action, the EU ETS stated that all members must submit the national allocation plan including the national's total allowances, allowances for installations, reserve for new entrants, etc. In the process of this decision-making, it was also stated that problems related with early action should be solved by each member state at its option. This paper is a study on necessity of compensation for early action and its limitation of its practices. With a comparative study on dealing with early action in the key nations including Germany, the Netherlands and United Kingdom, we can get insights and strategies for effective processes of dealing with early action and the direction for harmonizing data collection and allocation rules.

• Korea Trade Review
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• v.47 no.1
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• pp.115-130
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• 2022

In this study, I focus on analyzing how the effects of implementing ETS are different depending on whether Korean ETS linking with carbon markets in other countries. The global computable general equilibrium (CGE) model built in this study analyzes the chages in the production and trade of industrial sectors according to the international linkage of ETS compared to the reference scenario of emissions reduction targets and implementation of ETS. From the analysis of internatioanl linkage of carbon markets scenarios, Annex B countries-South Korea carbon market linkage with individual ETS in China worse the economic outcomes in South Korea the most. This means South Korea lose the international competitiveness compared to China in this scenario. On the other hand, Annex B-China carbon market linkage with Korean individual ETS implementation reduce the decreases in production and trading. The most effective way is to join a global emissions trading market with China. The results are consistent in most industries of South Korea. These results are caused by that the supply of emission allowance is increased and the price of emissions allowances is dropped by China's participation to the carbon market, which can be understood to reduce the carbon reduction cost for industrial sectors. In addition, it can be also concluded that the determinant of the negative impact of ETS on changes in production and trade is more sensitive to the price of emissions allowances than to the characteristics of production and trade structure.

• Management & Information Systems Review
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• v.33 no.3
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• pp.93-104
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• 2014

This study investigates price discovery between BlueNext spot and futures in EU ETS carbon emission markets using vector error correction model, GG and Hasbruck information ratio. Especially EUA is European Union Allowances traded on the Emissions Trading Scheme. This emission asset attracts and increasing attention among operators, investors and brokers on emission markets. In this study, we found BlueNext spot and EUA futures market are cointegrated. Following the preceding studies, we judged that EUA futures market contribute to the price discovery process than BlueNext spot market when this GG and Hasbrouck information ratio for BlueNext market are larger than 0.5. In other words, the futures market of EUA plays a more dominant role in price discovery than the spot market.