CO2-related financial exposure is widely considered to be the greatest single threat to current power generation portfolios. Corporate decisions are being taken today in anticipation of a CO2 price environment fraught with uncertainty. Over- or undershooting will have serious value consequences; given the degree of volatility, a properly hedged CO2 position will involve a balance between these extremes.
CERA's European Emissions Trading study addresses the following key questions:
- What is the role of carbon trading in Europe's overall energy policy framework?
- What are the status and direction of ETS market design, including the National Allocation Plans?
- What are the lessons to be drawn from other emissions trading schemes around the world?
- What are the costs for alternative abatement technologies in the power sector?
- What are the possible price ranges of CO2 allowances in Europe?