Substitution and Technological Change under Carbon Cap and Trade: Lessons from Europe

GTranslate

Source:
The World Bank
Authors:
Timothy Considine
Donald Larson
Date:
1 June 2009

This report studies the results of the European Union's Emissions Trading System--a cap-and-trade regulation--and it's impact on fuel switching for electricity production. This report analyzes short-term restrictions on fuel switching due to technology restrictions and variable inputs. The result of this analysis identifies that fuel-switching capacities are limited and that nations should begin planning for low-carbon futures early and allow for flexibility on how to achieve emission reduction goals.