Main points

  • The impact of ‘back-loading’, a short-term measure, will be limited.
  • ‘Back-loading’ is unlikely to have a significant impact on the price of emissions allowances, unless the ‘back-loaded’ allowances are permanently removed from the system at some point before 2020.
  • It is important that long-term structural reforms incorporate the required flexibility.
  • Because a price management mechanism is difficult to reconcile with the fundamental principles of an Emissions Trading System, a rule-based reserve management mechanism may be the appropriate option.

Luca Taschini

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