Fig. 38
Coverage decisions and the level of cost pass-through
determine the mitigation options available . . . . . . . . . . . . . . 531
Fig. 39
When coverage or cost pass-through is limited, any given
target will require more costly abatement. . . . . . . . . . . . . . . 532
Fig. 40
The decision of RGGI member states to limit coverage to
the power sector exaggerated the impacts of the
unconventional gas technology shock . . . . . . . . . . . . . . . . . 533
Fig. 41
Production shock concentrated in EU ETS sectors
exaggerated the impact of the EU recession on demand
for emission units. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 533
Fig. 42
Banking ensured prices remained positive despite
oversupply in the EU ETS . . . . . . . . . . . . . . . . . . . . . . . . . . 534
Fig. 43
Volatility in country emissions can be stabilised by
linking markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 535
Fig. 44
Compliance rules determine relative prices . . . . . . . . . . . . . 536
Fig. 45
Soft price floors and ceilings may result in prices
deviating outside their target range . . . . . . . . . . . . . . . . . . . 537
Fig. 46
California’s auction reserve price has limited falls in the
carbon price, but also reduced revenues . . . . . . . . . . . . . . . . 537
Fig. 47
The EU’s market stability reserve adjusts the quantity of
units in the market in response to over- or undersupply . . . 538
Fig. 48
As markets mature and participation increases, trading
tends to move to secondary exchanges. . . . . . . . . . . . . . . . . 539
Fig. 49
The growth of futures markets provides new
opportunities for risk management and improves price
discovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 539
Fig. 50
The design of the EU registry system has become more
centralised, and has developed to facilitate the
development of exchange trading platforms . . . . . . . . . . . . . 540
Fig. 51
The efficiency of climate policy is affected by the
interaction of carbon pricing with complementary,
overlapping and countervailing policies . . . . . . . . . . . . . . . . 541
Fig. 52
Labels may have helped improve consumer choice of
refrigerators in Australia. . . . . . . . . . . . . . . . . . . . . . . . . . . . 541
Fig. 53
Energy efficiency standards in the USA have reduced
energy use at a low cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . 542
Fig. 54
California’s low-carbon fuel certificates duplicate carbon
price incentives, with their high price reducing both
demand and price in the carbon market . . . . . . . . . . . . . . . . 543
Fig. 55
Many countries retain expensive fossil fuel subsidies that
counteract the goals of their carbon markets . . . . . . . . . . . . 543
Fig. 56
Evolutionary and revolutionary change differ in their
rate, level and type of impact. . . . . . . . . . . . . . . . . . . . . . . . 544
Fig. 57
The appropriate approach to policy change should be
based on the rate and level of change required, the
List of Figures
xxxi xxxi
Coverage decisions and the level of cost pass-through
determine the mitigation options available . . . . . . . . . . . . . . 531
Fig. 39
When coverage or cost pass-through is limited, any given
target will require more costly abatement. . . . . . . . . . . . . . . 532
Fig. 40
The decision of RGGI member states to limit coverage to
the power sector exaggerated the impacts of the
unconventional gas technology shock . . . . . . . . . . . . . . . . . 533
Fig. 41
Production shock concentrated in EU ETS sectors
exaggerated the impact of the EU recession on demand
for emission units. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 533
Fig. 42
Banking ensured prices remained positive despite
oversupply in the EU ETS . . . . . . . . . . . . . . . . . . . . . . . . . . 534
Fig. 43
Volatility in country emissions can be stabilised by
linking markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 535
Fig. 44
Compliance rules determine relative prices . . . . . . . . . . . . . 536
Fig. 45
Soft price floors and ceilings may result in prices
deviating outside their target range . . . . . . . . . . . . . . . . . . . 537
Fig. 46
California’s auction reserve price has limited falls in the
carbon price, but also reduced revenues . . . . . . . . . . . . . . . . 537
Fig. 47
The EU’s market stability reserve adjusts the quantity of
units in the market in response to over- or undersupply . . . 538
Fig. 48
As markets mature and participation increases, trading
tends to move to secondary exchanges. . . . . . . . . . . . . . . . . 539
Fig. 49
The growth of futures markets provides new
opportunities for risk management and improves price
discovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 539
Fig. 50
The design of the EU registry system has become more
centralised, and has developed to facilitate the
development of exchange trading platforms . . . . . . . . . . . . . 540
Fig. 51
The efficiency of climate policy is affected by the
interaction of carbon pricing with complementary,
overlapping and countervailing policies . . . . . . . . . . . . . . . . 541
Fig. 52
Labels may have helped improve consumer choice of
refrigerators in Australia. . . . . . . . . . . . . . . . . . . . . . . . . . . . 541
Fig. 53
Energy efficiency standards in the USA have reduced
energy use at a low cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . 542
Fig. 54
California’s low-carbon fuel certificates duplicate carbon
price incentives, with their high price reducing both
demand and price in the carbon market . . . . . . . . . . . . . . . . 543
Fig. 55
Many countries retain expensive fossil fuel subsidies that
counteract the goals of their carbon markets . . . . . . . . . . . . 543
Fig. 56
Evolutionary and revolutionary change differ in their
rate, level and type of impact. . . . . . . . . . . . . . . . . . . . . . . . 544
Fig. 57
The appropriate approach to policy change should be
based on the rate and level of change required, the
List of Figures
xxxi xxxi