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In order to calculate the financial return of energy efficiency measures, a cost–benefit analysis (CBA) is a proven tool for investors. Generally, however, most CBAs for investors have a narrow focus, which is—simply speaking—on investment costs compared with energy cost savings over the life span of the investment. This only provides part of the full picture. Ideally, a comprehensive or extended CBA would take additional benefits as well as additional costs into account. The objective of this paper is to reflect upon integrating into a CBA two important cost components: transaction costs and energy efficiency services—and how they interact. Even though this concept has not been carried out to the knowledge of the authors, we even go a step further to try to apply this idea. In so doing, we carried out a meta-analysis on relevant literature and existing data and interviewed a limited number of energy experts with comprehensive experience in carrying out energy services. Even though data is hardly available, we succeeded in constructing three real-world cases and applied an extended CBA making use of information gathered on transaction costs and energy services costs. We were able to show that, despite these additional cost components, the energy efficiency measures are economically viable. Quantitative data was not available on how energy services reduce transaction costs; more information on this aspect could render our results even more positive. Even though empirical and conceptual research must intensify efforts to design an even more comprehensive CBA, these first-of-its-kind findings can counterargue those that believe energy efficiency is not worth it (in monetary terms) due to transaction costs or energy services costs. In fact, this is good news for energy efficiency and for those that seek to make use of our findings to argue in favor of taking up energy efficiency investments in businesses.
Thomas Adisorn; Lena Tholen; Johannes Thema; Hauke Luetkehaus; Sibylle Braungardt; Katja Huenecke; Katja Schumacher. Towards a More Realistic Cost–Benefit Analysis—Attempting to Integrate Transaction Costs and Energy Efficiency Services. Energies 2020, 14, 152 .
AMA StyleThomas Adisorn, Lena Tholen, Johannes Thema, Hauke Luetkehaus, Sibylle Braungardt, Katja Huenecke, Katja Schumacher. Towards a More Realistic Cost–Benefit Analysis—Attempting to Integrate Transaction Costs and Energy Efficiency Services. Energies. 2020; 14 (1):152.
Chicago/Turabian StyleThomas Adisorn; Lena Tholen; Johannes Thema; Hauke Luetkehaus; Sibylle Braungardt; Katja Huenecke; Katja Schumacher. 2020. "Towards a More Realistic Cost–Benefit Analysis—Attempting to Integrate Transaction Costs and Energy Efficiency Services." Energies 14, no. 1: 152.
In the discussion on the potential risk of carbon leakage related to the EU ETS and the effect of safeguard measures, the scope for passing through carbon costs into final product prices is considered a key issue. This study investigates whether and to what extent ETS-related carbon costs have been passed through into product prices by EU industry. Literature on the issue of carbon cost pass-through in industry, other than electric power generation, is relatively sparse and we therefore aim to add to the knowledge gathered in this area so far. We investigate a number of products in six industry sectors in several European countries and regions and provide estimates for carbon cost pass-through for more than 50 product/country pairs. In line with the literature, our econometric results imply significant cost pass-through for a number of products, with results being most conclusive for the cement, iron and steel, and refineries sectors. The extent of the estimated pass-through rates diverges between products and countries/regions. These findings are aimed at informing discussions about carbon leakage protection for industries covered by the EU ETS.
Johanna Cludius; Sander de Bruyn; Katja Schumacher; Robert Vergeer. Ex-post investigation of cost pass-through in the EU ETS - an analysis for six industry sectors. Energy Economics 2020, 91, 104883 .
AMA StyleJohanna Cludius, Sander de Bruyn, Katja Schumacher, Robert Vergeer. Ex-post investigation of cost pass-through in the EU ETS - an analysis for six industry sectors. Energy Economics. 2020; 91 ():104883.
Chicago/Turabian StyleJohanna Cludius; Sander de Bruyn; Katja Schumacher; Robert Vergeer. 2020. "Ex-post investigation of cost pass-through in the EU ETS - an analysis for six industry sectors." Energy Economics 91, no. : 104883.
This paper focuses on the following two key research questions in the context of the change in allocation rules in the move from Phase I/II (2005–2012) to Phase III (2013–2020) of the European Emission Trading Scheme (EU ETS): First, how do allocations compare with actual installation-verified emissions in Phase III? For that purpose we analyse changes in sector-country allocations and verified emissions between Phase II and Phase III. The analysis is based on a selection of 2150 installations present in all phases of the EU ETS, taken from the European Union Transaction Log (EUTL) The results show that over-allocation has been considerably reduced in Phase III. Overall, allocation for the selected sectors decreased by 20% in 2013 compared to 2008 but varying across installations. Second, we investigate, whether the introduction of benchmarks in Phase III may have triggered carbon-reducing measures for industrial processes. For that purpose, we analyse for four product groups (cement clinker, pig iron, ammonia and nitric acid) the specific emissions (per tonne of product). Care was taken to define a data set with a similar delimitation of emission and production data. The findings were cross-checked through selected expert interviews. Our findings indicate that there is no evidence so far for improving specific emissions, though the strong improvement for nitric acid, as well as some improvement linked to ammonia occurring before the start of Phase III may have been supported by the introduction of Phase III.
Wolfgang Eichhammer; Nele Friedrichsen; Seán Healy; Katja Schumacher. Impacts of the Allocation Mechanism Under the Third Phase of the European Emission Trading Scheme. Energies 2018, 11, 1443 .
AMA StyleWolfgang Eichhammer, Nele Friedrichsen, Seán Healy, Katja Schumacher. Impacts of the Allocation Mechanism Under the Third Phase of the European Emission Trading Scheme. Energies. 2018; 11 (6):1443.
Chicago/Turabian StyleWolfgang Eichhammer; Nele Friedrichsen; Seán Healy; Katja Schumacher. 2018. "Impacts of the Allocation Mechanism Under the Third Phase of the European Emission Trading Scheme." Energies 11, no. 6: 1443.
This paper contributes to the existing literature on carbon leakage by using a range of different publically available datasets in order to develop a systematic approach for identifying whether products are potentially at risk of carbon leakage. The scope of this paper focuses on the cement and aluminium sectors at different levels of product aggregation to demonstrate the variation in trade patterns that exist over time. The evolution of EU-28 trade flows with third countries for these sectors between 2000 and 2016 enables the selection of key third countries that could warrant further investigation via more quantitative techniques in order to determine the impact of carbon pricing on trade patterns. This systematic approach could be replicated for additional sectors in further research as part of a more regular assessment to provide evidence of carbon leakage for European industry. No evidence of carbon leakage is found in this paper for clinker and cement, while there is no conclusive evidence for unwrought non-alloyed aluminium and aluminium products.
Sean Healy; Katja Schumacher; Wolfgang Eichhammer. Analysis of Carbon Leakage under Phase III of the EU Emissions Trading System: Trading Patterns in the Cement and Aluminium Sectors. Energies 2018, 11, 1231 .
AMA StyleSean Healy, Katja Schumacher, Wolfgang Eichhammer. Analysis of Carbon Leakage under Phase III of the EU Emissions Trading System: Trading Patterns in the Cement and Aluminium Sectors. Energies. 2018; 11 (5):1231.
Chicago/Turabian StyleSean Healy; Katja Schumacher; Wolfgang Eichhammer. 2018. "Analysis of Carbon Leakage under Phase III of the EU Emissions Trading System: Trading Patterns in the Cement and Aluminium Sectors." Energies 11, no. 5: 1231.
The German energy transition strategy aims at moving towards a sustainable energy supply and demand over the long term. It consists of many different activities and measures to address existing greenhouse gas mitigation potentials and to mobilize the necessary resources to reach stringent mitigation targets. It builds upon the federal government’s Energy and Climate Programme (BMU 2007) as well as its Energy Concept (BMU & BMWI 2010) and is described in detail in various official documents (BMU & BMWI 2011). The National Climate Initiative (NCI)2 of the German Federal Ministry for the Environment (BMUB) represents an important element of the programmes and measures relating to the Energiewende. It aims to provide substantial support for the reduction of Germany’s GHG emissions by 40% by 2020 and by 80-95% by 2050 compared to 1990 levels.
Katja Schumacher; Maria Rosaria Di Nucci; Benjamin Görlach; Max Grünig; Christina Heldwein; Julia Repenning; Sarah Rieseberg; Kerstin Tews; Christine Wörlen; Hans-Joachim Ziesing. Evaluation as a Cornerstone of Policies and Measures for the Energiewende. Im Hürdenlauf zur Energiewende 2014, 369 -385.
AMA StyleKatja Schumacher, Maria Rosaria Di Nucci, Benjamin Görlach, Max Grünig, Christina Heldwein, Julia Repenning, Sarah Rieseberg, Kerstin Tews, Christine Wörlen, Hans-Joachim Ziesing. Evaluation as a Cornerstone of Policies and Measures for the Energiewende. Im Hürdenlauf zur Energiewende. 2014; ():369-385.
Chicago/Turabian StyleKatja Schumacher; Maria Rosaria Di Nucci; Benjamin Görlach; Max Grünig; Christina Heldwein; Julia Repenning; Sarah Rieseberg; Kerstin Tews; Christine Wörlen; Hans-Joachim Ziesing. 2014. "Evaluation as a Cornerstone of Policies and Measures for the Energiewende." Im Hürdenlauf zur Energiewende , no. : 369-385.
Our objective is to provide a balanced analysis of greenhouse gas mitigation options, across a variety of climate policy scenarios, for Germany. At least four classes of greenhouse gas mitigation options are available: energy efficiency, fuel switching, CO2 capture and storage (CCS), and reductions in emissions of non-CO2 greenhouse gases. These options vary by cost, timing, and our ability to represent them in an economic analysis. We use the Second Generation Model, an economy-wide computable general equilibrium (CGE) model that embodies greenhouse gas mitigation possibilities from the energy system and CCS. Policy scenarios are represented as a response to varying levels of a price for greenhouse gas emissions, either applied economy-wide or targeted at energy-intensive sectors of the economy according to the EU emissions trading scheme. Energy efficiency options are represented in the standard CGE format where non-energy inputs substitute for energy inputs within economic production functions, or system of consumer demand equations, as the price of energy increases relative to other goods. The electric power sector provides substantial opportunities for fuel switching and the deployment of advanced electricity-generating technologies, with and without CO2 capture and storage. Our methodology relies on engineering descriptions of electricity-generating technologies and how their competitive positions vary with a CO2 price or change in fuel price. Further, we allow for reduction of emissions of non-CO2 gases, which adds a set of mitigation opportunities not usually included in energy-economic modeling efforts. A formal decomposition methodology is used to isolate the contribution of each greenhouse gas mitigation option.
Ronald D. Sands; Katja Schumacher. Economic comparison of greenhouse gas mitigation options in Germany. Energy Efficiency 2008, 2, 17 -36.
AMA StyleRonald D. Sands, Katja Schumacher. Economic comparison of greenhouse gas mitigation options in Germany. Energy Efficiency. 2008; 2 (1):17-36.
Chicago/Turabian StyleRonald D. Sands; Katja Schumacher. 2008. "Economic comparison of greenhouse gas mitigation options in Germany." Energy Efficiency 2, no. 1: 17-36.
Katja Schumacher; Ronald Sands. Where are the industrial technologies in energy–economy models? An innovative CGE approach for steel production in Germany. Energy Economics 2007, 29, 799 -825.
AMA StyleKatja Schumacher, Ronald Sands. Where are the industrial technologies in energy–economy models? An innovative CGE approach for steel production in Germany. Energy Economics. 2007; 29 (4):799-825.
Chicago/Turabian StyleKatja Schumacher; Ronald Sands. 2007. "Where are the industrial technologies in energy–economy models? An innovative CGE approach for steel production in Germany." Energy Economics 29, no. 4: 799-825.