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Responses to EU Carbon Pricing: The Effect of Carbon Emissions Allowances on Renewable Energy Development in Advanced and Transitional EU Members

dc.contributor.advisor Pratson, Lincoln
dc.contributor.advisor Timmins, Chris
dc.contributor.author Dearing, Jack
dc.date.accessioned 2019-05-11T15:21:07Z
dc.date.available 2019-05-11T15:21:07Z
dc.date.issued 2019-04-24
dc.identifier.uri https://hdl.handle.net/10161/18558
dc.description.abstract Using electricity price, generation, installed capacity, and carbon price data from the European Union from January 2015 to December 2018, this study finds that the carbon pricing in the European Union Emissions Trading Scheme (EU ETS) incentivizes electricity sector carbon emission reductions through renewable energy deployment only for economically advanced EU members. Transitional economies show a weak to modest carbon emission increase despite a common carbon price. This study estimates an electricity supply curve, or merit order, for 24 EU ETS members using a Tobit regression model and analyzes changes in this curve using a linear bspline. These shifts provide insight into how carbon pricing affected energy generation, price, and CO2 emissions for two distinct categories of EU member states. The advanced category as a whole saw a strong electricity sector decrease in carbon emissions, both over time and from carbon pricing, while the transitional category as a whole saw a weak increase. This indicates that advanced EU members in Northern, Western, and Central Europe likely sold permits to transitional ones in Southern and Eastern Europe. While these findings may initially reflect the gains from trade of carbon emissions permits inherent in the European Union Emissions Trading Scheme’s design, the implications of how these two distinct groups have changed electricity generation present challenges to the ultimate long-term goal of EU-wide carbon neutrality by 2050, particularly in transitional economies’ electricity sectors.
dc.language.iso en_US
dc.subject Carbon Pricing
dc.subject Renewable Energy
dc.subject Cap-and-Trade
dc.subject European Union
dc.subject Electricity Market
dc.title Responses to EU Carbon Pricing: The Effect of Carbon Emissions Allowances on Renewable Energy Development in Advanced and Transitional EU Members
dc.type Honors thesis
dc.department Economics
duke.embargo.months 0


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