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Cited by 279

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Auctioning of EU ETS phase II allowances: how and why?

Open access
Hepburn, Cameron, Grubb, Michael, Neuhoff, Karsten, Matthes, Felix, Tse, Maximilien·2006·Climate Policy
DOI 10.1080/14693062.2006.9685592
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Abstract

The European Directive on the EU ETS allows governments to auction up to 10% of the allowances issued in phase II 2008–2012, without constraints being specified thereafter. This article reviews and extends the long-standing debate about auctioning, in which economists have generally supported and industries opposed a greater use of auctioning. The article clarifies the key issues by reviewing six ‘traditional’ considerations, examines several credible options for auction design, and then proposes some new issues relevant to auctioning. It is concluded that greater auctioning in aggregate need not increase adverse competitiveness impacts, and could in some respects alleviate them, particularly by supporting border-tax adjustments. Auctioning within the 10% limit might also be used to dampen price volatility during 2008–2012 and, in subsequent periods, it offers the prospect of supporting a long-term price signal to aid investor confidence. The former is only possible, however, if Member States are willing to coordinate their decision-making (though not revenue-raising) powers in defining and implementing the intended pricing mechanisms.

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Metadata

Authors
Hepburn, C., Grubb, M., Neuhoff, K., Matthes, F., & Tse, M.
Venue
Climate Policy
Publisher
Informa UK Limited
Published
2006-01
Volume
6
Issue
1
Pages
137-160
ISSN
  • 1469-3062 (ISSN-L)
  • 1752-7457
DOI
10.1080/14693062.2006.9685592
OpenAlex
W2130093701
Cited by
279
References
3
FWCI
59.73
Type
journal article
Language
en
Open access
green

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CoChat. (2026). Citation check: Auctioning of EU ETS phase II allowances: how and why? https://app.cochat.ai/papers/10.1080/14693062.2006.9685592
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Hepburn, C., Grubb, M., Neuhoff, K., Matthes, F., & Tse, M. (2006). Auctioning of EU ETS phase II allowances: how and why? Climate Policy. https://doi.org/10.1080/14693062.2006.9685592

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