Raphaël Trotignon defended his PhD « In Search of the Carbon Price. The European CO2 Emission Trading Scheme: From ex ante and ex postanalysis to the projection in 2020 » at Paris-Dauphine University.
This thesis is an evaluation of the first two phases of the EU ETS. It is articulated around the progressive construction of a simulation model, ZEPHYR-Flex, which aims at being able to replicate the observed price and emissions trajectories between 2005 and 2012, and to project them until 2020 under different sets of assumptions. The ex post analysis of the first eight years of the system reveals that to understand its development, it is necessary to study in details the role played by three flexibility mechanisms: trading, spatial flexibility (offsets), and time flexibility (banking/borrowing). In a first stage, we build a technical-economic framework for the core trading mechanism of the model. The role of offsets is then scrutinized and a scenario for their use up to 2020 is calculated on this basis. Next, the time flexibility and the related banking and borrowing behavior are introduced into the model which can then replicate the past price and emission trajectory. The model and the lessons from the first two phases are then used in different prospective scenarios to 2020. Among the scenarios tested, only a strengthening of the cap in line with the 2050 European reduction target is able to restore confidence and anticipations, two factors needed for the efficiency of the EU ETS in the long term. The issue of correctly articulating the EU ETS with other climate-energy policies is also underlined.