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Business & Economics

European GHG Emission Trading Scheme in Lithuania
Dalia Streimikiene, Rasa Pusinaite

ABSTRACT. The paper concentrates on results of GHG emission trading in Lithuania and criticizes the attempt of the Government of Lithuania to regulate the GHG emission trading scheme in Lithuania. National Allocation Plan for Greenhouse Gas Emission Allowances for 2005-2007 was prepared for Lithuania in 2004, according to which 36.796 thousands allowances given to Lithuania were allocated in the following way: 34.404 thousands allowances were allocated to installations; 1.840 thousands – to the planned reserve for new installations; 552 thousands – for sale in the auction.

Analysis of first trading period indicated that in 2005 just 3 installations from total 93 installations included in GHG emission trading scheme emitted into atmosphere more GHG emissions than the GHG emission allowances they have been allocated for. In general during 2005-2006 enterprises of the Republic of Lithuania did not use 10.955,3 thousands allowances, 9.692 thousands allowances out of which were transferred, and acquired additionally from other EU countries 575.0 thousands allowances. During 2005-2006 a price of one allowance ranged from Lt 3 to Lt 103, and Lithuanian enterprises which sold 9.692 thousands allowances could have received income from Lt 29 to Lt 998 million.

The Republic of Lithuania asked the European Commission to set a general annual amount of allowances – 16.7 Mt in CO₂ equivalent for the period 2008-2012. The European Commission gave 8.9 Mt. Because of reduced caps for 2008-2012 Lithuania and other new member states have announced legal challenges against the EC due to reduced allocations however economic crisis of 2008 corrected the threats of GHG emission shortage and the first results of GHG emission trading in 2008-2012 indicated the surplus of emission allowances in Lithuania and some new member states as well.

KEYWORDS: GHG emissions, environment and trade, emission allowances, National allocation plan, Lithuania.

JEL classification: H23, Q51, Q52, Q54, Q56, P2.