With or without U(K) : a pre-Brexit network analysis of the EU ETS

Open Access

Abstract

The European Emission Trading System (EU ETS) is commonly regarded as the key pillar of the European climate policy and as the main unifying tool to create a unique carbon price all over Europe. The UK has always played a crucial role in the EU ETS, being one of the most active national registry and a crucial hub for the exchange of allowances in the market. Brexit, therefore, could deeply modify the number and directions of such exchanges as well as the centrality of the other countries in this system. To investigate these issues, the present paper exploits network analysis tools to compare the structure of the EU ETS market in its first two phases with and without the UK, investigating a few different scenarios that might emerge from a possible reallocation of the transactions that have involved UK partners. We find that without the UK the EU ETS network would become in general much more homogeneous, though results may change focusing on the type of accounts involved in the transactions. ; Simone Borghesi received funding from the University of Siena (2017-2019 Research Grant) and by the Italian Ministry of Education (PRIN). The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript. ; Data Availability: The data underlying the results presented in the study are available from the European Transaction Log, URL: http://ec.europa.eu/environment/ets/transaction.do;EUROPA_JSESSIONID=2ftK1xBz5n1BQ3AYKj_nZtcOdTm8NlFWJPCFpAN92yYt61TtXe1t!1363888161.