Auctioning of emissions: possibilities for new political management approaches

Trading emission allowances has gained increasing prominence as a key climate protection policy throughout the world. The political as well as economic debate on how to allocate the allowances has shifted away from a free allocation procedure to a selling approach via auctions.

The study discussed prospects of auctioning emission allowances as an integral element of future international climate policies. The purpose of this paper was two-fold: one, it discussed what countries like Germany have so far gained regarding auctioning emission allowances. To this end, the main aspects of the political debate and the technical organisation were outlined. Second, the study outlined the main aspects of the German Climate Protection Initiative, which earmarks revenues for national as well as international climate protection projects.

The discussion of initial experiences with the instrument of auctioning emission allowances could help to inform the debate in other countries that are in the process to set-up emission trading systems and need to decide on several design aspects. It was discussed with staffers from US Congress during a briefing, organised by the Heinrich Boell Foundation in Washington and the Environment and Energy Studies Institute (EESI).