A coordination failure between EU climate policies exemplified by the North Sea energy island

Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt

Standard

A coordination failure between EU climate policies exemplified by the North Sea energy island. / Kruse-Andersen, Peter K.; Jacobsen, Marc S.

I: Climate Policy, 2024.

Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt

Harvard

Kruse-Andersen, PK & Jacobsen, MS 2024, 'A coordination failure between EU climate policies exemplified by the North Sea energy island', Climate Policy. https://doi.org/10.1080/14693062.2023.2287074

APA

Kruse-Andersen, P. K., & Jacobsen, M. S. (Accepteret/In press). A coordination failure between EU climate policies exemplified by the North Sea energy island. Climate Policy. https://doi.org/10.1080/14693062.2023.2287074

Vancouver

Kruse-Andersen PK, Jacobsen MS. A coordination failure between EU climate policies exemplified by the North Sea energy island. Climate Policy. 2024. https://doi.org/10.1080/14693062.2023.2287074

Author

Kruse-Andersen, Peter K. ; Jacobsen, Marc S. / A coordination failure between EU climate policies exemplified by the North Sea energy island. I: Climate Policy. 2024.

Bibtex

@article{a4c75cb97237419ab38eaa5841b56c6a,
title = "A coordination failure between EU climate policies exemplified by the North Sea energy island",
abstract = "We highlight a coordination problem between the EU Emissions Trading System (ETS) and the EU's offshore renewable energy strategy. We exemplify this coordination failure by analyzing carbon leakage effects associated with Denmark's planned North Sea energy island. The Danish energy island project will not start production before 2033, implying a long interval between project announcement and production. Using a dynamic model of the EU ETS, we show that the large time gap between announcement and production likely results in a {\textquoteleft}Green Paradox{\textquoteright}, where the energy island increases aggregate EU ETS emissions. The mechanism leading to the emission increase is complicated and works through the Market Stability Reserve (MSR). The estimated 2050 leakage rate is 145 percent in our main scenario and not below 100 percent in any alternative scenario. We discuss how to improve the climate benefits of the energy island or similar large-scale renewable energy projects. This includes possible revisions to the EU ETS and the role of Power-to-X technologies.",
keywords = "Cap-and-trade, EU ETS, Green Paradox, Market Stability Reserve, overlapping policies",
author = "Kruse-Andersen, {Peter K.} and Jacobsen, {Marc S.}",
note = "Publisher Copyright: {\textcopyright} 2023 Informa UK Limited, trading as Taylor & Francis Group.",
year = "2024",
doi = "10.1080/14693062.2023.2287074",
language = "English",
journal = "Climate Policy",
issn = "1469-3062",
publisher = "Earthscan Ltd.",

}

RIS

TY - JOUR

T1 - A coordination failure between EU climate policies exemplified by the North Sea energy island

AU - Kruse-Andersen, Peter K.

AU - Jacobsen, Marc S.

N1 - Publisher Copyright: © 2023 Informa UK Limited, trading as Taylor & Francis Group.

PY - 2024

Y1 - 2024

N2 - We highlight a coordination problem between the EU Emissions Trading System (ETS) and the EU's offshore renewable energy strategy. We exemplify this coordination failure by analyzing carbon leakage effects associated with Denmark's planned North Sea energy island. The Danish energy island project will not start production before 2033, implying a long interval between project announcement and production. Using a dynamic model of the EU ETS, we show that the large time gap between announcement and production likely results in a ‘Green Paradox’, where the energy island increases aggregate EU ETS emissions. The mechanism leading to the emission increase is complicated and works through the Market Stability Reserve (MSR). The estimated 2050 leakage rate is 145 percent in our main scenario and not below 100 percent in any alternative scenario. We discuss how to improve the climate benefits of the energy island or similar large-scale renewable energy projects. This includes possible revisions to the EU ETS and the role of Power-to-X technologies.

AB - We highlight a coordination problem between the EU Emissions Trading System (ETS) and the EU's offshore renewable energy strategy. We exemplify this coordination failure by analyzing carbon leakage effects associated with Denmark's planned North Sea energy island. The Danish energy island project will not start production before 2033, implying a long interval between project announcement and production. Using a dynamic model of the EU ETS, we show that the large time gap between announcement and production likely results in a ‘Green Paradox’, where the energy island increases aggregate EU ETS emissions. The mechanism leading to the emission increase is complicated and works through the Market Stability Reserve (MSR). The estimated 2050 leakage rate is 145 percent in our main scenario and not below 100 percent in any alternative scenario. We discuss how to improve the climate benefits of the energy island or similar large-scale renewable energy projects. This includes possible revisions to the EU ETS and the role of Power-to-X technologies.

KW - Cap-and-trade

KW - EU ETS

KW - Green Paradox

KW - Market Stability Reserve

KW - overlapping policies

UR - http://www.scopus.com/inward/record.url?scp=85178206075&partnerID=8YFLogxK

U2 - 10.1080/14693062.2023.2287074

DO - 10.1080/14693062.2023.2287074

M3 - Journal article

AN - SCOPUS:85178206075

JO - Climate Policy

JF - Climate Policy

SN - 1469-3062

ER -

ID: 375548501