Inclusion of Consumption in Emissions Trading
Year: 2015 Past Project
Countries need to increase action towards low-carbon transition to align with the Paris Agreement, creating new policy options and opportunities. Against this background, this project explored whether inclusion of domestic sales of energy intensive commodities in domestic emission trading schemes is an effective approach to restoring the carbon price signal in these sectors, without damaging competitiveness.
- Key Publications
- Report: Inclusion of Consumption of Carbon Intensive Materials in Emissions Trading, An Option for Carbon Pricing Post-2020
Updated Policy Briefs
- Climate Contribution and its role in European industrial decarbonization (2020), WISE Europe
- Green Deal for Industry: A Clear Policy Framework Is More Important Than Funding (2021), DIW
- Pricing Carbon Consumption: A Review of an Emerging Trend (2016)
- Legal Design and Practical Administration (2016)
- Quantifying Impact of Inclusion of Consumption (2016)
- Refined version: Carbon Pricing of Basic Materials: Incentives and Risks for the Value Chain and Consumers (2021)
- Legal Status within EU (2015)
- Follow up analysis: Border Carbon Adjustments and Alternative Measures for the EU ETS: An Evaluation (2020)
Preceding sector level analysis
Climate Strategies convened 17 international research partners led by DIW Berlin to analyse whether and how this can be implemented in practice.
Legal and administrative assessments show that inclusion of consumption of carbon intensive materials can be aligned with existing procedures of public and private actors. The consumption-based approach also avoids WTO and political challenges with trade-related measures.
The project carried out a number of highly informative stakeholder consultations and workshops. All publications for this project are available on this page.
Media coverage for this project included an op-ed by Karsten Neuhoff on Energy Post and coverage on Carbon Pulse. The project was finalised with an event in the European Parliament, Brussels, on Tuesday May 24, 2016 hosted by Jens Geier MEP (S&D).
This project was a precursor to Climate Strategies and DIW Berlin’s collaborative project investigating options to reduce emissions from the basic materials sector.