Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments August 1, 2023 erstellt
Description:
Overlapping climate policies can interact in undesired ways. This paper is the first to employ an event study to investigate the interaction of national coal phase-outs and the European emissions trading system (EU ETS) by empirically examining how allowance prices reacted to coal phase-out announcements and related events. A negative price reaction would represent evidence of detrimental interaction effects and the shortcoming of the EU ETS’s market stability reserve. However, this study finds no consistent evidence of statistically significant price changes across 15 coal phase-out announcements in 13 countries. The only partial exception is the German coal phase-out, where an allowance price decline is detectable in some specifications. Multiple explanatory factors for the results are identified. Coal phase-outs’ lack of additionality and market actors’ myopia likely contribute to the insignificance of the estimates. Germany’s price reaction under some specifications hints at non-credible long-term political commitment to the country’s intended unilateral allowance cancellations. Thus, while the interaction of national coal phase-outs and the EU ETS has been modelled as potentially harmful, empirical evidence cannot confirm that allowance price effects have indeed materialised