Searching for a carbon laffer curve : estimates from the European Union Emissions Trading System
License
Cadmus Permanent Link
Full-text via DOI
ISBN
ISSN
0026-1386; 1467-999X
Issue Date
Type of Publication
Keyword(s)
LC Subject Heading
Other Topic(s)
EUI Research Cluster(s)
Initial version
Published version
Succeeding version
Preceding version
Published version part
Earlier different version
Initial format
Author(s)
Citation
Metroeconomica, 2024, OnlineFirst
Cite
MAZZARANO, Matteo, BORGHESI, Simone, Searching for a carbon laffer curve : estimates from the European Union Emissions Trading System, Metroeconomica, 2024, OnlineFirst - https://hdl.handle.net/1814/76774
Abstract
Carbon prices have grown remarkably in the European Union (EU) Emissions Trading System (ETS) in recent years, raising distributional concerns. Revenues are expected to grow with higher carbon prices, thus providing resources to address distributional issues. Beyond a certain point, however, higher prices can discourage the purchase of allowances and ultimately reduce revenues, describing a Carbon Laffer Curve (CLC). We empirically investigate the CLC in the EU ETS between 2012 and 2021 using auction revenues at the country level. Results indicate that ETS revenues follow an inverted-U relationship in both the volume and the price of auctioned allowances, with an estimated optimal price between 86 and 125 euros.
Table of Contents
Additional Information
Published online: 15 March 2024