Assessment of White Certificate Schemes and Their Integration into the Carbon Markets

Recently a number of countries have introduced market-based instruments to foster energy efficiency improvements. Some of these schemes are based on quantified energy savings targets for energy distributors or suppliers, coupled with a certification of the energy savings (via white certificates), and a possibility to trade certificates. This policy instrument often targets parts of the sectors (e.g. power generation) that are subject to carbon reduction targets (mainly under cap-and-trade schemes). The paper presents an up-to-date review of white certificate schemes in Europe, and analyses results achieved so far. It discusses design and operational features that are key to achieve the overall saving targets. Delineation of the scheme in terms of eligible projects, technologies and parties, institutional structure and processes to support the scheme are among the issues discussed. The paper analyses the arguments for and against integration of white certificates with CO2 emission trading in order to achieve the maximum environmental benefit as well as a high degree of economic efficiency, and evaluates the implications of integration in practice.