Fig. 16
The evolution of power market policy focus, measures
and outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 490
Fig. 17
Progress towards efficient power market structures . . . . . . . 492
Fig. 18
Progress towards carbon pricing and market competition
between fuel sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 493
Fig. 19
Progress towards efficient management
of the power grid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 493
Fig. 20
Efficient power market structures and policies for a net
zero emissions world . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495
Fig. 21
The power system comprises three markets, which
can be managed through central control or market
mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 496
Fig. 22
Most countries are slowly moving from central to market
mechanisms; this is expected to accelerate with
decarbonisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 497
Fig. 23
Market power is mainly managed through regulation,
rather than incentives, especially the power grid . . . . . . . . . 497
Fig. 24
Decarbonisation in most countries is driven by central
control, rather than by market mechanisms . . . . . . . . . . . . . 498
Fig. 25
Targets and tasks of the new round of power
system reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503
Fig. 26
Competition in the power market before
and after reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 504
Fig. 27
The gains from better climate policy will grow over time,
as low-cost mitigation is exhausted and more mitigation
is required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 522
Fig. 28
Achieving cost-effective abatement makes some policy
objectives easier, but may require trade-offs with others . . . 523
Fig. 29
The social objectives frontier represents all potentially
optimal outcomes based on societies’ preferences
regarding two objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . 524
Fig. 30
An effective carbon price will be both efficient
and robust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 525
Fig. 31
The transition trap explains how a carbon market may
become stuck in an ineffective equilibrium . . . . . . . . . . . . . 526
Fig. 32
Carbon markets have experienced persistently
low prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 526
Fig. 33
Targets and coverage decisions largely determine
ETS caps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527
Fig. 34
Projections of continued growth in energy use may have
resulted in the adoption of a weaker target in the EU . . . . . 528
Fig. 35
EU ETS grandparenting contributed to overallocation,
which lowered prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 529
Fig. 36
The manner of assistance provided to companies
determines the mitigation possibilities available . . . . . . . . . . 530
Fig. 37
Differentiated and declining assistance in the Australian
ETS signalled transition to auctions . . . . . . . . . . . . . . . . . . . 531
xxx
List of Figures
xxx
The evolution of power market policy focus, measures
and outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 490
Fig. 17
Progress towards efficient power market structures . . . . . . . 492
Fig. 18
Progress towards carbon pricing and market competition
between fuel sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 493
Fig. 19
Progress towards efficient management
of the power grid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 493
Fig. 20
Efficient power market structures and policies for a net
zero emissions world . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495
Fig. 21
The power system comprises three markets, which
can be managed through central control or market
mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 496
Fig. 22
Most countries are slowly moving from central to market
mechanisms; this is expected to accelerate with
decarbonisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 497
Fig. 23
Market power is mainly managed through regulation,
rather than incentives, especially the power grid . . . . . . . . . 497
Fig. 24
Decarbonisation in most countries is driven by central
control, rather than by market mechanisms . . . . . . . . . . . . . 498
Fig. 25
Targets and tasks of the new round of power
system reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503
Fig. 26
Competition in the power market before
and after reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 504
Fig. 27
The gains from better climate policy will grow over time,
as low-cost mitigation is exhausted and more mitigation
is required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 522
Fig. 28
Achieving cost-effective abatement makes some policy
objectives easier, but may require trade-offs with others . . . 523
Fig. 29
The social objectives frontier represents all potentially
optimal outcomes based on societies’ preferences
regarding two objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . 524
Fig. 30
An effective carbon price will be both efficient
and robust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 525
Fig. 31
The transition trap explains how a carbon market may
become stuck in an ineffective equilibrium . . . . . . . . . . . . . 526
Fig. 32
Carbon markets have experienced persistently
low prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 526
Fig. 33
Targets and coverage decisions largely determine
ETS caps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527
Fig. 34
Projections of continued growth in energy use may have
resulted in the adoption of a weaker target in the EU . . . . . 528
Fig. 35
EU ETS grandparenting contributed to overallocation,
which lowered prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 529
Fig. 36
The manner of assistance provided to companies
determines the mitigation possibilities available . . . . . . . . . . 530
Fig. 37
Differentiated and declining assistance in the Australian
ETS signalled transition to auctions . . . . . . . . . . . . . . . . . . . 531
xxx
List of Figures
xxx