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Abstract: Carbon accounting has evolved rapidly over the past twenty years and now encompasses a wide range of activities with significant financial implications. This paper examines how competence in carbon accounting is being defined and claimed by different actors and communities. Specifically, it focuses on the role of the accountancy profession in carbon accounting, charting its engagement over time and its relationship with other communities involved in carbon accounting. The paper builds on recent work showing that multiple framings and activities are associated with carbon accounting, leading to conflicting views on what it means, how it should be done, and who should be involved. It draws on the concepts of epistemic communities and boundary-work to help explain the role of professions and the emergence of new institutions that mediate between different communities to achieve policy change. We find that, while accountants have undisputed authority in the field of financial reporting of rights and liabilities created under emissions trading schemes (’financial carbon accounting’), their claims to competence in other aspects of organisational carbon accounting overlap with those made by several other communities. Although the accountancy profession’s interest in organisational carbon accounting can be traced back at least as far as 2001, the introduction of emissions trading in Europe in 2005 coincided with the start of a new, as yet largely un-scrutinised, initiative to extend its claims of relevant expertise, through a variety of methods including the promotion of standards for disclosure of physical and strategic climate-related information. The Climate Disclosure Standards Board provides an example of a boundary organisation that has been established by different communities with an interest in carbon accounting, with mutually beneficial results, which has nevertheless resulted in the production of a new Climate Change Reporting Framework that is heavily aligned towards the existing competence of accountancy professionals. [Copyright &y& Elsevier]

Abstract: This paper presents a mixed activity-based costing decision (MABCD) model for green airline fleet planning under the constraints of the European Union Emissions Trading Scheme (EU ETS), in which activity-based costing (ABC) model is incorporated with a modified product-mix decision model for total operating costs of individual flights under EU ETS constraints. A numerical example for comparing cost-effectiveness between the B747-400 airline and the A380 airline in one of the busiest route between Asia and Europe is demonstrated. It is shown that subject to different changes of revenue tone kilometers (RTK), the cost trends of carbon emissions and the changes in profits of different flight routes appear to be similar. Moreover, it is also shown that when the RTK are higher, a choice of a wider-bodied aircraft could lead to higher profits. Finally, it is shown that without the pre-assumptions of considering more complicated routes and financing methods, a self-purchased aircraft appears to contribute more profits. [Copyright &y& Elsevier]

Political feasibility (or infeasibility) is often associated with target-group support (or opposition) of specific policy alternatives. We argue that target-groups' capacity to influence the spectrum of politically feasible policy options tends to be higher when (1) target groups control resources needed by decision-makers, that (2) are agenda-setters and/or veto players in the decision-making process. In the 2008 revision of the European Union Emissions Trading Scheme (EU ETS) exemptions from the basic principle of full auctioning of greenhouse gas (GHG) emissions allowances can all be traced to target-group interest representation by single veto players or blocking minorities in the European Council and the Council of Ministers. Our analysis indicates that target groups succeeded in constraining the spectrum of politically feasible policy options to the extent that their positions were unified and threats to shut down or relocate activity were perceived to be relevant, severe and credible. Our findings confirm both the significance and the limits of portfolio assignment in the Commission. Even with Directorate General (DG) Environment in an agenda-setting role, target groups acquired exemptions through their relations with veto players in the Council. [ABSTRACT FROM AUTHOR]

The article discusses the legal frameworks of emissions trading in Europe. The European Union Emissions Trading Scheme could be described as the largest experiment to date with the creation of regulatory property. 2005 saw the launch of a trading market for greenhouse gas emission allowances as a primary pillar in the European Community strategy to lessen global warming. The main feature of the scheme lies in the establishment of a regulatory framework for trade in greenhouse gas allowances with detailed provisions on the administrative arrangements and procedures.

The European emissions trading scheme (EU ETS) has an efficient and effective market design that risks being undermined by three interrelated problems: the approach to allocation; the absence of a credible commitment to post-2012 continuation; and concerns about its impact on the international competitiveness of key sectors. This special issue of Climate Policy explores these three factors in depth. This policy overview summarizes key insights from the individual studies in this issue, and draws overall policy conclusions about the next round of allocations and the design of the system for the longer term. • Allocations for 2008-2012. Allocations defined relative to projected 'business-as-usual' emissions should involve cutbacks for all sectors, in part to hedge against an unavoidable element of projection inflation. Additional cutbacks for the power sector could help to address distributional and legal (State aid) concerns. Benchmarking allocations, e.g. on best practice technologies, could offer important advantages: experience in different sectors and countries is needed, given their existing diversity. However, a common standard for new entrant reserves should be agreed across the EU, based on capacity or output, not on technology or fuel. Maximum use of allowed auctioning (10%) would improve efficiency, provide reassurance, and potentially help to stabilize the system through minimum-price auctions. These measures will not preclude most participating sectors from profiting from the EU ETS during phase II. Companies can choose to scale back these potential profits to protect market share against imports and/or use the revenues to support longer term decarbonization investments, whilst auction revenues can be used creatively to support broader investments towards a lowcarbon industrial sector in Europe. • Post-2012 design. Effective operation during phase II requires a concrete commitment to continue the EU ETS beyond 2012 with future design addressing concerns about distribution, potential perverse incentives, and industrial competitiveness. Declining free allocation combined with greater auctioning offers the simplest solution to distributional and incentive problems. For its unilateral implementation to be sustainable under higher carbon prices over longer periods, EU ETS post-2012 design must accommodate one of three main approaches for the most energy-intensive internationally traded sectors: international (sectoral) agreements, border-tax adjustments, or output-based (intensity) allocation. If significant free allocations continue, governments may also need to follow the example of monetary policy in establishing independent allocation authorities with some degree of EU coordination. Such reform for the post-2012 period would require the Directive to be fundamentally renegotiated in relation to allocation procedures. Such renegotiation is neither feasible nor necessary for phase II operation. Rather, phase II should be a period in which diverse national approaches build experience, whilst the profits potentially accruing to participating sectors can be used to protect market share and jump-start their investments for a globally carbonconstrained future. [ABSTRACT FROM AUTHOR]

The European Directive on the EU ETS allows governments to auction up to 10% of the allowances issued in phase II 2008-2012, without constraints being specified thereafter. This article reviews and extends the longstanding debate about auctioning, in which economists have generally supported and industries opposed a greater use of auctioning. The article clarifies the key issues by reviewing six 'traditional' considerations, examines several credible options for auction design, and then proposes some new issues relevant to auctioning. It is concluded that greater auctioning in aggregate need not increase adverse competitiveness impacts, and could in some respects alleviate them, particularly by supporting border-tax adjustments. Auctioning within the 10% limit might also be used to dampen price volatility during 2008-2012 and, in subsequent periods, it offers the prospect of supporting a long-term price signal to aid investor confidence. The former is only possible, however, if Member States are willing to coordinate their decision-making (though not revenue-raising) powers in defining and implementing the intended pricing mechanisms. [ABSTRACT FROM AUTHOR]

This article provides a legal analysis of some of the key issues that arise in examining the system for allocating emissions allowances under the EU's emissions trading scheme directive (EU ETS). There is a strong series of arguments in support of the view that the free allocation of allowances under the various national allocation plans (NAPs) involves an element of State aid, which has neither been formally notified to, nor cleared by, the Commission under the EC Treaty. Even if it is found properly to have been notified, there are serious doubts as to whether the extent of aid granted satisfies the proportionality principle. As a result, the operation of the EU ETS may be subject to some legal uncertainty with regard to possible legal challenges to the current allocation of allowances. Going forward, proposals to amend the operation of the EU ETS must take into account similar State aid considerations (particularly proportionality) and the experience gained from the working of the EU ETS in phase I. The structural outline of a possible legislative package has been suggested, which could achieve the safeguarding of commercial and legal certainty under the current allocation regime, while at the same time providing a basis for amendment of the allocation mechanism under the EU ETS for phase II and beyond. [ABSTRACT FROM AUTHOR]

The article discusses the impact of Europe's carbon emission trading scheme on the energy industry. The European Union Emissions Trading Scheme (ETS), launched in 2005 aims to minimise the economic costs of meeting Kyoto commitments to combat climate change. Under the provisions of the ETS, carbon dioxide emitters are allocated allowances on an installation-specific basis detailing the level of emissions they can release each year. It is viewed that the ETS will place upward pressure on wholesale electricity prices Moreover, it will also affect the relative output of different types of plant. INSET: Carbon costs..

On 9 December 2002 the (Environment) Council of the European Union unanimously agreed on a common position on a Commission's proposal for a Directive establishing a scheme for greenhouse gas emissions allowance trading. This follows the idea that a common European emissions trading system should be preferred above a collection of national emissions trading systems. The European framework for emissions trading needs to he filled in by the Member States. One of their main tasks will be to allocate the greenhouse gas allowances according to a National Allocation Plan. The use of new regulatory instruments as emissions trading will raise new legal questions, which not always can be foreseen before the real application of the instrument in practice. It does not seem to he that the relevant institutions in the European Community already have a clear insight in all the necessary provisions for a well-functioning and just emissions trading, scheme. Especially the allocation of the tradable emissions rights can be questioned. With the present criteria, the allocation of the transferable rights will likely be a complicated and probably time-consuming task for the national governments. The European politicians seem to be willing, to take this risk with emissions trading, in order to build experience [ABSTRACT FROM AUTHOR]

The author addresses the possible design features of a maritime carbon dioxide emissions regulatory regime. She outlines the significant issue of the possible geographical scope of a European Emissions Trading Scheme (EU ETS) by differentiating ships such as those with EU flags and those with non-EU flags. She offers an outlook on possible developments of regulation.

The article offers information on the developments of the emissions trading systems of the European Union. It explains that the concept of carbon leakage relates to the risk that activities in sectors subject to strong international competition might relocate from the EU to the third countries. It also mentions that the Court of First Instance (CFI) condemned the European Commission in two cases for failure to exercise its power correctly.

This commentary discusses the European Union's Emissions Trading system. In their very instructive and useful overview of the European Union's Emissions Trading System (EU ETS), "Greenhouse Gas Trading in Europe: The New Grand Policy Experiment," Joseph A. Kruger and William A. Pizer note that implementation of the system has been an impressively rapid process. They indicate that a main factor for understanding the character and speed of this process is the constructive use of lessons from U.S. trading programs by EU decisionmakers. The EU's high-speed decision-making process in constructing the emissions trading system can basically be understood and explained by a combination and interaction of three perspectives. First, the EU system was more ripe and ready for emissions trading when the process started in 1998 than may be readily apparent. Second, the European Commission (the Commission), the formal EU agenda-setter, played an extraordinarily strong entrepreneurial role throughout the development of the system, which sped up the process. Third, there is the perspective of the lessons learned from the U.S. emissions trading experience, as emphasized by Kruger and Pizer.

Reports that theEuropean Commission has approved eight more national allocation plans for the European Union carbon dioxide emissions trading scheme.