TY - JOUR
T1 - The strategic use of auctioning revenues to foster energy efficiency
T2 - status quo and potential within the European Union Emissions Trading System
AU - Wiese, Catharina
AU - Cowart, Richard
AU - Rosenow, Jan
PY - 2020
Y1 - 2020
N2 - Auctioning revenues in the European Union Emissions Trading System are likely to increase in the future. This projection is driven by recent changes within the system’s framework, which address the current surplus of emission allowances and reduce the overall cap. Considering a growing amount of auctioning revenues, it becomes even more important to assess the use of these revenues and their potential contribution to accelerate decarbonisation efforts. We argue that strategic investments in energy efficiency programmes provide opportunities for realising multiple benefits: additional emission reductions from both ETS and non-ETS sectors, lower economic and societal decarbonisation costs and support for the political process to further tighten the ETS cap. Our assessment of the status of auctioning revenue use at the EU Member State level shows that Member States have made only limited use of these multiple benefits in recent years. In 2017, no more than 21.4% of total revenues have been strategically invested in energy efficiency programmes, as Member States have officially reported to the European Environment Agency’s reporting obligations database. However, efficiency programmes funded by auctioning revenues in Germany and Czech Republic present promising cases for the strategic use of auctioning revenues. We conclude that the EU carbon price can provide important signals to investors and energy users, but auctioning revenues can also be a powerful tool in the energy transition and the strategic use of revenues needs to be accelerated in all Member States.
AB - Auctioning revenues in the European Union Emissions Trading System are likely to increase in the future. This projection is driven by recent changes within the system’s framework, which address the current surplus of emission allowances and reduce the overall cap. Considering a growing amount of auctioning revenues, it becomes even more important to assess the use of these revenues and their potential contribution to accelerate decarbonisation efforts. We argue that strategic investments in energy efficiency programmes provide opportunities for realising multiple benefits: additional emission reductions from both ETS and non-ETS sectors, lower economic and societal decarbonisation costs and support for the political process to further tighten the ETS cap. Our assessment of the status of auctioning revenue use at the EU Member State level shows that Member States have made only limited use of these multiple benefits in recent years. In 2017, no more than 21.4% of total revenues have been strategically invested in energy efficiency programmes, as Member States have officially reported to the European Environment Agency’s reporting obligations database. However, efficiency programmes funded by auctioning revenues in Germany and Czech Republic present promising cases for the strategic use of auctioning revenues. We conclude that the EU carbon price can provide important signals to investors and energy users, but auctioning revenues can also be a powerful tool in the energy transition and the strategic use of revenues needs to be accelerated in all Member States.
KW - Auctioning revenue use
KW - Energy efficiency programmes
KW - European Union Emissions Trading System (EU ETS)
U2 - 10.1007/s12053-020-09894-0
DO - 10.1007/s12053-020-09894-0
M3 - Journal article
C2 - 32952486
AN - SCOPUS:85090843927
SN - 1570-646X
VL - 13
SP - 1677
EP - 1688
JO - Energy Efficiency
JF - Energy Efficiency
IS - 8
ER -