nach oben

Energy Efficiency

Erschienen in:

12.09.2020 | Short Communication

The strategic use of auctioning revenues to foster energy efficiency: status quo and potential within the European Union Emissions Trading System

verfasst von: Catharina Wiese, Richard Cowart, Jan Rosenow

Erschienen in: Energy Efficiency | Ausgabe 8/2020

Einloggen

Aktivieren Sie unsere intelligente Suche, um passende Fachinhalte oder Patente zu finden.

search-config

KI-gestützte Suche

Aus

Abstract

Auctioning revenues in the European Union Emissions Trading System are likely to increase in the future. This projection is driven by recent changes within the system’s framework, which address the current surplus of emission allowances and reduce the overall cap. Considering a growing amount of auctioning revenues, it becomes even more important to assess the use of these revenues and their potential contribution to accelerate decarbonisation efforts. We argue that strategic investments in energy efficiency programmes provide opportunities for realising multiple benefits: additional emission reductions from both ETS and non-ETS sectors, lower economic and societal decarbonisation costs and support for the political process to further tighten the ETS cap. Our assessment of the status of auctioning revenue use at the EU Member State level shows that Member States have made only limited use of these multiple benefits in recent years. In 2017, no more than 21.4% of total revenues have been strategically invested in energy efficiency programmes, as Member States have officially reported to the European Environment Agency’s reporting obligations database. However, efficiency programmes funded by auctioning revenues in Germany and Czech Republic present promising cases for the strategic use of auctioning revenues. We conclude that the EU carbon price can provide important signals to investors and energy users, but auctioning revenues can also be a powerful tool in the energy transition and the strategic use of revenues needs to be accelerated in all Member States.

Vorheriger Artikel A screening method for lowering customer acquisition cost in small commercial building energy efficiency projects

Nächster Artikel Techno-economic analysis of distributed absorption cooling system driven by a district heating system

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Springer Professional "Technik"

Online-Abonnement

Mit Springer Professional "Technik" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 390 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Maschinenbau + Werkstoffe

Jetzt Wissensvorsprung sichern!

Jetzt informieren

In Europe and globally, energy use patterns changed dramatically in the first half of 2020 due to the COVID-19 global pandemic, and total energy consumption is expected to decline meaningfully in 2020 (see Le Quéré et al. 2020). While such reductions may help Member States to meet overall energy consumption targets in 2020, reductions in energy use due to economic crises, natural disasters and political disruption are hardly the kind of demand reductions sought by energy efficiency policies. Moreover, they are unlikely to persist so as to meet Europe’s emission targets for 2030 and 2050. For these reasons, it remains an important public policy goal to continue making progress on embedded improvements in energy efficiency, even in times of broad economic stress.

This increase compares the total auctioning revenues in 2016 and 2017 for all EU Member States but France, which has not reported revenues for 2017 yet, and Bulgaria, which has locked its report for public view in 2016 and 2017. 2016 total revenues without France and Bulgaria amounted to 3.47 billion euros. 2017 total revenues amounted to 5.09 billion euros.

e.g. https://markets.businessinsider.com/commodities/co2-european-emission-allowances (Accessed 08 April 2020)

Available at https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32018L0410&from=EN (Accessed 18 December 2018)

The policy mix for reaching decarbonisation targets cost effectively is not limited to energy efficiency policies but also includes, e.g. renewable energy support and research and development for clean technologies, which also overcome some of the limits to carbon pricing and the reliance on a single pricing instrument. However, the economic and societal cost advantages of energy efficiency and the need for funding to stimulate efficiency investments among a large number of end-users make it a particularly important resource to utilise. These are principal justifications for the policies adopted by the EU and other jurisdictions that call for implementing the ‘energy efficiency first principle’.

While this paper presents and focuses on the rationale and evidence for investing EU ETS auctioning revenues in cost-effective energy efficiency measures, the topic of reinvesting carbon revenues could also be relevant on a broader scale. The European Commission and Parliament as well as individual Member States are currently considering a range of energy policies and tax reforms that could also yield new revenues. These include the carbon border adjustment mechanism proposed in the European Green Deal, carbon floor prices adopted or under discussion in Member States, extending the ETS to the buildings and transport sectors and revising the energy taxation directive (e.g. European Commission 2019c; Euractiv 2020).

This calculation is based on the power price increases due to carbon pricing, i.e. the extra cost to consumers and the avoided tonnes of GHG emissions due to the impact on the merit order of dispatch (Cowart 2011). Note: Although the modelling timeframe in the study from Cambridge Econometrics and the Energy Research Centre of the Netherlands (2013) was set to 2020, the analysis of interactions between cap reductions, carbon prices, emissions and end-use energy efficiency are still relevant and provide meaningful results at all timescales.

The wholesale power price is lower due to the demand reduction for energy and EU allowances. Both demand reductions have a lowering effect on the clearing price on competitive power markets.

Note: We do not want to claim that using auctioning revenues is inherently better than other ways to fund energy efficiency. However, there are at least two reasons to promote it: (i) It is aligned with the whole goal of the EU ETS, which is to reduce emissions at lowest practicable cost and should thus be viewed as integral to the design of the EU ETS, just like the LRF or the MSR. (ii) As a matter of practical politics, making the revenue available via a dedicated revenue stream avoids the problems of stop-and-go funding when energy efficiency relies on annual appropriations.

Art. 10(3) and Art. 3d(4) of Directive 2003/87/EC provide a more detailed list of eligible purposes. Retrieved from: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02003L0087-20140430&from=EN.

Specified in Art. 17 of Regulation (EU) No 525/2013. Retrieved from https://publications.europa.eu/en/publication-detail/-/publication/4bf8306c-dab2-4fa0-8c83-8d44d760b31f/language-en

International use comprises funding of multilateral (e.g. United Nations Framework Convention on Climate Change (UNFCCC) Green Climate Fund) or bilateral programme support.

Member states submit their reports to the European Environment Agency’s reporting obligations database (ROD), part of the European Environment Information and Observation Network (EIONET). Deliveries are available at http://rod.eionet.europa.eu/obligations/698/deliveries (Accessed 09 January 2019).

This amount of 2017 auctioning revenues and the further assessment of the Member States’ reporting do not include France, which has not reported its revenues for 2017 yet, and Bulgaria, which has locked its report for public view.

Romania reports to use 0% of their 2017 auctioning revenue for energy- and climate-related purposes, while Malta reports to use a higher amount for energy- and climate-related purposes than their total auctioning revenue. This difference might occur due to the use of carryover revenues from years before 2017. However, the reported data provides no further explanation.

We are aware that this approach only gives an approximation of Germany’s auctioning revenue use; however, the available data does not allow for more detailed conclusions. The analysis of domestic use required the following additional data processing: (1) interpretation of committed versus disbursed spending on a country-by-country basis. Some Member States report both committed and disbursed amounts, with the disbursed amounts being included in the committed amounts, while other Member States report both amounts separately. (2) Where Member States report ambiguous domestic types of use or the reported type does not match the purpose of revenue use (i.e. specific programme support), we took a further look at the individual programmes, if provided, to categorise the Member States’ domestic use.

The aggregated use category includes funding of research and development (R&D) for clean technologies and energy efficiency (1.0%), of R&D and demonstration projects for reducing emissions and for adaptation (0.1%), other reductions of GHG emissions (0.2%), forestry sequestration in the Union (0.1%), adaptation to the impacts of climate change (1.0%), cross-cutting measures (2.0%) and coverage of administrative expenses of the management of the ETS scheme (0.3%). These investment categories are officially listed as energy- and climate-related purposes in the EU ETS Directive. We have added the category ‘cross-cutting measures’, in case multiple purposes have been reported for the same amount of spending and aggregated the categories for which only a small share of domestic revenues is used in order to ensure a clearer presentation in Fig. 1.

For an assessment of all Member States providing cost compensation, see, e.g. Marcu et al. (2019).

This debate is not limited to energy efficiency improvements but even more established with respect to increased adoption of renewable energy sources (e.g. Del Río González 2007) and starts to include policy changes on the national level, e.g. coal phase-out proposals (Ecofys 2016).

The ability of the MSR to absorb the impact of complementary policies on the supply and demand imbalance and the carbon price effect are, however, still uncertain and rely on potential adjustments after the MSR reviews scheduled for 2021 and 2026. The opposite MSR mechanism to release allowances to the market when a lower threshold of allowances in circulation is reached is not expected to be utilised before 2030 (Marcu et al. 2018).

Through 2017, RGGI states allocated 58% of revenues to energy efficiency, 14% to clean and renewable energy, 14% in direct bill assistance and 8% to other GHG abatement measures (Regional Greenhouse Gas Initiative, Inc. 2019).

Agence nationale de l’habitat (ANAH) (2020) (online resource). Retrieved from: www.anah.fr/proprietaires/proprietaires-occupants/etre-mieux-chauffe-avec-habiter-mieux/. Accessed 11 Sept 2020.

Barranzini, A., van den Bergh, J., Carrattini, S., Howarth, R., Padilla, E., & Roca, J. (2017). Carbon pricing in climate policy: seven reasons, complementary instruments, and political economy considerations. WIREs Climate Change, 8(4).

Bennear, L. S., & Stavins, R. N. (2007). Second-best theory and the use of multiple policy instruments. Environmental and Resource Economics, 37(1), 111–129.CrossRef

Cambridge Econometrics and the Energy Research Centre of the Netherlands (2013). Investing EU ETS auction revenues into energy savings. Retrieved from: https://publications.tno.nl/publication/34629216/k8ac50/e13033.pdf.. Accessed 11 Sept 2020.

Cowart, R. (2011). Prices and policies: carbon caps and efficiency programmes for Europe’s low-carbon future. ECEEE 2011 Summer Study. Retrieved from: https://www.eceee.org/library/conference_proceedings/eceee_Summer_Studies/2011/. Accessed 11 Sept 2020.

Cowart, R., Bayer, E., Keay-Bright, S., & Lees, E. (2015). Carbon Caps and Efficiency Resources: Launching a “Virtuous Circle” for Europe. Retrieved from: https://www.raponline.org/knowledge-center/. Accessed 11 Sept 2020.

Cunha Montenegro, R., Lekavičius, V., Brajković, J., Fahl, U., & Hufendiek, K. (2019). Long-term distributional impacts of European cap-and-trade climate policies: a CGE multi-regional analysis. Sustainability, 11, 6868.CrossRef

Del Río González, P. (2007). The interaction between emissions trading and renewable electricity support schemes. An overview of the literature. Mitigation and Adaptation Strategies for Global Change, 12(8), 1363–1390.CrossRef

Department of Communications, Climate Action & Environment (2017). National Energy Efficiency Action Plan for Ireland 2017-2020. Retrieved from: https://ec.europa.eu/energy/sites/ener/files/documents/ie_neeap_2017.pdf. Accessed 11 Sept 2020.

Diefenbach, N, Stein, B., Loga, T., Rodenfels, M., & Jahn, K. (2018). Monitoring der KfW-Programme „Energieeffizient Sanieren“ und „Energieeffizient Bauen“ 2017. Retrieved from: https://www.kfw.de/KfW-Konzern/Newsroom/Aktuelles/News-Details_498497.html. Accessed 11 Sept 2020.

Ecofys. (2016). The waterbed effect and the EU ETS: an explanation of a possible phasing out of Dutch coal fired power plants as an example.

Ecologic Institute and WWF (2016). Smart Cash for the Climate: Maximising Auctioning Revenues from the EU Emissions Trading System. Retrieved from: https://www.ecologic.eu/sites/files/publication/2016/2596-smartcashforclimate-full-report_0.pdf. Accessed 11 Sept 2020.

Euractiv (2019). Luxembourg to deploy carbon tax from 2021. Retrieved from: www.euractiv.com/section/climate-environment/news/luxembourg-to-deploy-carbon-tax-from-2021/.

Euractiv (2020). France calls for carbon price floor to counter oil crash. Retrieved from: www.euractiv.com/section/emissions-trading-scheme/news/france-calls-for-carbon-price-floor-to-counter-oil-crash/.

European Commission (2019a). Report from the Commission to the European Parliament and the Council: Report on the functioning of the European carbon market. Retrieved from: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2019:0557:FIN. Accessed 11 Sept 2020.

European Commission (2019b). Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: United in delivering the Energy Union and Climate Action - Setting the foundations for a successful clean energy transition. Retrieved from: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52019DC0285. Accessed 11 Sept 2020.

European Commission (2019c). Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions: The European Green Deal. Retrieved from: https://ec.europa.eu/info/sites/info/files/european-green-deal-communication_en.pdf. Accessed 11 Sept 2020.

Fowlie, M. (2019). The Trouble With Carbon Pricing. Energy Institute at Haas. Retrieved from: https://energyathaas.wordpress.com/2019/04/29/the-trouble-with-carbon-pricing/.. Accessed 11 Sept 2020.

Friedrich, M., & Pahle, M. (2019). Allowance Prices in the EU ETS – Fundamental Price Drivers and the Recent Upward Trend. Working Paper, Potsdam Institute for Climate Impact Research. Retrieved from: https://www.pik-potsdam.de/research/transformation-pathways/projects/ahead/scientfic-articles. Accessed 11 Sept 2020.

Gillingham, K., Newell, R. G., & Palmer, K. (2009). Energy efficiency economics and policy. Annual Review of Resource Economics, 1(1), 597–620.CrossRef

IEA. (2018). Energy efficiency 2018: analysis and outlooks to 2040. Paris: International Energy Agency Retrieved from: http://www.oecd.org/publications/energy-efficiency-2018-9789264024304-en.htm. Accessed 11 Sept 2020.

Jaffe, A. B., & Stavins, R. N. (1994). The energy-efficiency gap: What does it mean? Energy Policy, 22(10), 804–810.CrossRef

Klenert, D., Mattauch, L., Combet, E., Edenhofer, O., Hepburn, C., Rafaty, R., & Stern, N. (2018). Making carbon pricing work for citizens. Nature Climate Change, 8, 669–677.CrossRef

Le Den, X., Beavor, E., Porteron, S., & Ilisescu, A. (2017). Analysis of the use of auction revenues by the Member States. Retrieved from: https://ec.europa.eu/clima/sites/clima/files/ets/auctioning/docs/auction_revenues_report_2017_en.pdf. Accessed 11 Sept 2020.

Le Quéré, C., Jackson, R. B., Jones, M. W., et al. (2020). Temporary reduction in daily global CO₂ emissions during the COVID-19 forced confinement. Nature Climate Change, 10, 647–653.CrossRef

Marcu, A., Alberola, E., Caneill, J-Y., Mazzoni, M., Schleicher, S.P., Stoefs, W., Vailles, C., & Vangenechten, D. (2018). 2018 State of the EU ETS Report. Retrieved from: https://www.i4ce.org/download/2018-state-of-the-ets-report/. Accessed 11 Sept 2020.

Marcu, A., Alberola, E., Caneill, J-Y., Mazzoni, M., Schleicher, S.P., Vailles, C., Stoefs, W., Vangenechten, D., & Cecchetti, F. (2019). 2019 State of the EU ETS Report. Retrieved from: https://www.i4ce.org/download/2019-state-of-the-eu-ets-report/. Accessed 11 Sept 2020.

Ministry of Industry and Trade (2017). Vyhodnocení: Státního programu na podporu úspor energie a využití obnovitelných a druhotných zdrojů energie za rok 2016. Retrieved from: https://www.mpo-efekt.cz/upload/62d0d69c2bcb052223969e1a31d35403/vyhodnoceni-statniho-programu-2016.pdf. Accessed 11 Sept 2020.

Perino, G. (2018). New EU ETS Phase 4 rules temporarily puncture waterbed. Nature Climate Change, 8(4), 262–264.CrossRef

Press Association (2019). Ireland to raise carbon tax to €80 per tonne, Taoiseach tells UN. Breaking News. Retrieved from: www.breakingnews.ie/ireland/ireland-to-raise-carbon-tax-to-80-per-tonne-taoiseach-tells-un-952610.html. Accessed 11 Sept 2020.

Rabe, B. G. (2016). The durability of carbon cap-and-trade policy. Governance, 29(1), 103–119.CrossRef

Rabe, B. G. (2018). Can We Price Carbon? MIT. Cambridge: University Press.CrossRef

Raymond, L. (2016). Reclaiming the Atmospheric Commons: The Regional Greenhouse Gas Initiative and a New Model of Emissions Trading. MIT. Cambridge: University Press.CrossRef

Regional Greenhouse Gas Initiative, Inc (2019). The Investments of RGGI Proceeds in 2017. Retrieved from: https://www.rggi.org/sites/default/files/Uploads/Proceeds/RGGI_Proceeds_Report_2017.pdf. Accessed 11 Sept 2020.

Rosenow, J., & Kern, F. (2017). EU Energy Innovation Policy - The curious case of energy efficiency. In R. Leal-Arcas & J. Wouters (Eds.), Research Handbook on EU energy law and policy. Cheltenham: Edward Elgar Publishing.

Rosenow, J., Graichen, J., & Scheuer, S. (2018). Destination Paris: why the EU’s climate policy will derail without energy efficiency. Retrieved from: http://www.raponline.org/knowledge-center/. Accessed 11 Sept 2020.

Sandbag (2017). An agenda for strategic reform of the ETS. Retrieved from: https://ember-climate.org/wp-content/uploads/2017/12/Strategic-Reform-of-the-ETS-2017-Sandbag-1.pdf. Accessed 11 Sept 2020.

Thema, J., Suerkemper, F., Couder, J., Mzavanadze, N., Chatterjee, S., Mzavanadaze, N., Chaterjee, S., Teubler, J., Thomas, S., Ürge-Vorsatz, D., Bo Hansen, M., Bouzarovski, S., Rasch, J., & Wilke, S. (2019). The multiple benefits of the 2030 EU energy efficiency potential. Energies, 12(14), 2798.CrossRef

Wiese, C., Cowart, R., & Rosenow, J. (2018). Carbon leverage: Investing Europe’s carbon revenues in energy efficiency. Retrieved from: https://www.raponline.org/knowledge-center/. Accessed 11 Sept 2020.

Wiese C., Cowart, R., & Rosenow, J. (2019). Auctioning revenues to foster energy efficiency: status quo and future potential within the European emissions trading system. ECEEE 2019 Summer Study. Retrieved from: https://www.eceee.org/library/conference_proceedings/eceee_Summer_Studies/2019/. Accessed 11 Sept 2020.

Zámečník, M., & Lhoták, T. (2012). Should the government invest in energy efficiency of buildings? Macroeconomic impact assessment [Executive Summary]. Retrieved from: http://www.buildup.eu/en/practices/publications/should-government-invest-energy-efficiency-buildings-macroeconomic-impact. Accessed 11 Sept 2020.

Zeitung für Kommunale Wirtschaft (2018). Mittel des EKF werden nicht abgerufen. Retrieved from: https://www.zfk.de/politik/deutschland/artikel/mittel-des-ekf-werden-nicht-abgerufen-2018-04-20/.

Titel: The strategic use of auctioning revenues to foster energy efficiency: status quo and potential within the European Union Emissions Trading System
verfasst von: Catharina Wiese
Richard Cowart
Jan Rosenow
Publikationsdatum: 12.09.2020
Verlag: Springer Netherlands
Erschienen in: Energy Efficiency / Ausgabe 8/2020
Print ISSN: 1570-646X
Elektronische ISSN: 1570-6478
DOI: https://doi.org/10.1007/s12053-020-09894-0

Springer Professional

Abstract

Bitte loggen Sie sich ein, um Zugang zu Ihrer Lizenz zu erhalten.

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Springer Professional "Technik"

Weitere Artikel der Ausgabe 8/2020

The role of staff assignment in implementing energy-conserving practices in small- and medium-sized firms: an empirical analysis based on data from a Japanese survey

Market segmentation and energy efficiency—an empirical study based on China’s provincial panel data

Energy efficient route planning for electric vehicles with special consideration of the topography and battery lifetime

Venting for health: indoor air quality improvements from upgraded ventilation systems in multifamily high-rise housing

Durability of building fabric components and ventilation systems in passive houses

Design and realisation of the Passive House concept in different climate zones