The Allocation of Emission Allowances Free of Charge: Legal and Economic Considerations

by Ingrid Jegou, Luca Rubini

Transition to a Low Carbon Future Series • Issue Paper 18

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This piece of research looks into the practice of using free allowances within an ETS, and analyses whether this can amount to a subsidy. The purpose is to shed light on a policy tool that is widely used, and to discuss whether it might conflict with trade and trade rules and thus with the opportunities of trade to contribute to sustainable development.

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