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Book Description: This volume examines issues surrounding the allocation of allowances in the EU emissions trading scheme and the implications for Phase II of this hugely important program. This special issue of Climate Policy covers the crucial issues concerning allocation, including assessments of the allocation plans proposed by EU member states and the competitive distortions allocation can create for the power and heat sector. The research ranges from detailed country by country comparisons to a more generic analysis which puts forward the case for harmonization. Empirical papers, looking at the expected scarcity of allowances in the market, and merging models for the power and non power sector to project emissions of the covered sector and contrast these to the aggregate allocation volume, are complemented with two numerical simulations of trade and distributional effects, estimating the efficiency gains of the EU ETS in Phase I and assessing allocation and distributional effects in the RGGI context. Finally, an editorial summarizes the findings of these papers and examines how they have informed policy makers in the context of the larger debate.

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