This paper addresses three basic questions:

  1. What is the likely scale and distribution of revenues
    associated with auctioning allowances under the currently proposed structure of
    EU ETS Phase III, and how might this be affected if the EU were to move to a
    stronger 2020 cap?
  2. What might be the revenues raised by moving to auctioning
    in the cement and/or steel sectors, with full auctioning from
    2013 representing the extreme case?
  3. What might be appropriate uses of revenues raised under
    Phase III and how do these relate to current EU commitments, plans and concerns
    in climate change, competitiveness and beyond?