Research Article
The Road to a Downstream Emissions Trading System: Designing a Scheme Combining Motorist and Government Participation
Table 1
The proposed Scheme features compared with the EU ETS.
| | | | EU ETS | Proposed ETS |
| | General | Sectors | Energy, Industrial processes, Agriculture, Waste, Aviation | Road Transport
(Motor Vehicles) | | Carbon Price | Fluctuates | Hybrid | | Participation | Mandatory | Voluntary |
| | Size | Point of regulation | Downstream (polluter) | Downstream (polluter) | | Trade participants | Emitters (industries) | Local governments (proxy) | | Cap participants | Emitter (Motorists) | | GHGs covered | CO2, N2O, PFCs | CO2 content of fuels |
| | Allocation | Method | Grandfathering, then Benchmarking & Auction | Benchmarking (pegged on baseline consumption) | | Allowance value | Free/auctioning | Free | | Price protection | Market Stability Reserve | Government controlled |
| | Flexibility | Offsets & Credits | CDM/JI | Offset Project Fund |
| | Compliance | Accounting | MRV | Chip card system | | Enforcement | Penalty to emitter | Penalty to retail fuel stations |
| | Others | Leakage risk | High | Low | | Sector linkage | Yes | Not recommended |
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