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Restoring Balance: Assessing Norwegian Installation-Level Emissions under the Market Stability Reserve

Hällgren, Pontus LU (2024) EKHS35 20241
Department of Economic History
Abstract (Swedish)
The fight against climate change has reached a crossroads, necessitating critical assessment of the means designed to mitigate the ongoing crisis. This thesis examines the impact of the Market Stability Reserve (MSR) on installation-level emissions and emissions intensities in Norway. The MSR, introduced in 2019, was designed to address the surplus of emissions allowances in the EU Emissions Trading System (ETS) by stabilizing the uphill price trajectory of allowances and thereby incentivize firms to transition towards low-carbon technologies. Its impact is analyzed using installation-level carbon emissions data from Norway’s Pollution Transfer and Release Register (PRTR) between 2013-2023. A difference-in-differences (DiD) matching... (More)
The fight against climate change has reached a crossroads, necessitating critical assessment of the means designed to mitigate the ongoing crisis. This thesis examines the impact of the Market Stability Reserve (MSR) on installation-level emissions and emissions intensities in Norway. The MSR, introduced in 2019, was designed to address the surplus of emissions allowances in the EU Emissions Trading System (ETS) by stabilizing the uphill price trajectory of allowances and thereby incentivize firms to transition towards low-carbon technologies. Its impact is analyzed using installation-level carbon emissions data from Norway’s Pollution Transfer and Release Register (PRTR) between 2013-2023. A difference-in-differences (DiD) matching methodology exploiting installation-level inclusion criteria is utilized to estimate the impact of the MSR on installations’ emissions and emissions intensities. The findings show no statistically significant effects on absolute emissions, but some significant reductions in emissions intensities are observed. The general lack of significant effects may be due to data constraints, the delayed impact of market-based climate policies, and Norway’s already decarbonized economy. Additional research is needed to better understand the MSR’s effectiveness, ideally evaluating the policy’s impact in the context of a different, less decarbonized country. (Less)
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author
Hällgren, Pontus LU
supervisor
organization
course
EKHS35 20241
year
type
H2 - Master's Degree (Two Years)
subject
language
English
id
9170606
date added to LUP
2024-07-12 11:10:10
date last changed
2024-07-12 11:10:10
@misc{9170606,
  abstract     = {{The fight against climate change has reached a crossroads, necessitating critical assessment of the means designed to mitigate the ongoing crisis. This thesis examines the impact of the Market Stability Reserve (MSR) on installation-level emissions and emissions intensities in Norway. The MSR, introduced in 2019, was designed to address the surplus of emissions allowances in the EU Emissions Trading System (ETS) by stabilizing the uphill price trajectory of allowances and thereby incentivize firms to transition towards low-carbon technologies. Its impact is analyzed using installation-level carbon emissions data from Norway’s Pollution Transfer and Release Register (PRTR) between 2013-2023. A difference-in-differences (DiD) matching methodology exploiting installation-level inclusion criteria is utilized to estimate the impact of the MSR on installations’ emissions and emissions intensities. The findings show no statistically significant effects on absolute emissions, but some significant reductions in emissions intensities are observed. The general lack of significant effects may be due to data constraints, the delayed impact of market-based climate policies, and Norway’s already decarbonized economy. Additional research is needed to better understand the MSR’s effectiveness, ideally evaluating the policy’s impact in the context of a different, less decarbonized country.}},
  author       = {{Hällgren, Pontus}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Restoring Balance: Assessing Norwegian Installation-Level Emissions under the Market Stability Reserve}},
  year         = {{2024}},
}