Title page 1

Contents 1

Abstract 2

1. Introduction 4

2. Methodology 8

3. Data and Sample 11

3.1. Data Sources and Model Specifications 11

3.2. Sample Construction 11

4. Results 13

4.1. Stand-Alone Analysis of Individual ETS 13

4.1.1. Impacts of EU-ETS on CO₂ Emissions in All Participating EU Countries 13

4.1.2. Impacts of EU-ETS on CO₂ Emissions in EU-15 Countries 18

4.1.3. Impacts of Emission Trading in New Zealand (NZ-ETS) on CO₂ Emissions 22

4.1.4. Impacts of Emission Trading in the Republic of Korea (SK-ETS) on CO₂ Emissions 25

4.2. Comparison of EU-ETS, NZ-ETS and SK-ETS 29

5. Conclusions and Policy Implications 30

Acknowledgments and disclaimer 31

References 31

Appendix 34

Table 1. Summary Statistics 12

Table 2. Effect of EU-ETS on CO₂ Emissions, All EU Countries 16

Table 3. Effect of EU-ETS on CO₂ Emissions by Year, All EU Countries 16

Table 4. Effect of EU-ETS on CO₂ Emissions, EU-15 Countries 20

Table 5. Effect of EU-ETS on CO₂ Emissions by Year, EU-15 Countries 20

Table 6. Effect of NZ-ETS on CO₂ Emissions 24

Table 7. Effect of NZ-ETS on CO₂ Emissions by Year 24

Table 8. Effect of SK-ETS on CO₂ Emissions 27

Table 9. Effect of SK-ETS on CO₂ Emissions by Year 28

Table 10. Effect of ETS on CO₂ emissions under the Three ETSs for the First 3 Years Since Their Introduction 29

Figure 1. Power Sector and National Level CO₂ Emissions, EU Countries 14

Figure 2. Effect of EU-ETS on Electricity CO₂ Emissions, All EU Countries Specification 3, All Estimators 17

Figure 3. Equivalence Test, EU-ETS 18

Figure 4. Power Sector and National Level CO₂ Emissions, EU15 countries 19

Figure 5. Effect of EU-ETS on CO₂ Emissions, EU-15 Countries MC Estimator 21

Figure 6. Power Sector and National Level CO₂ Emissions in New Zealand 22

Figure 7. Effect of NZ-ETS on CO₂ Emissions, MC Estimator 25

Figure 8. Power Sector and National Level CO₂ Emissions in the Republic of Korea 27

Figure 9. Effect of SK-ETS on CO₂ Emissions, MC Estimator 28