Allocation process decisions

The final traditional area of dispute concerns administrative costs. The phase I national allocation plans (NAPs) involved negotiation over allowances with a total asset value of almost 50 billion per year (assuming an average price of 20/tCO2). Political decisions on how to allocate these assets between sectors and individual installations naturally creates intensive lobby activity by all participants in order to obtain the maximum possible share of the rents.21 The time and energy devoted by companies, governments, and indeed consultancy and research sectors, to this enormous rent allocation process represents huge transactional costs.22... 

Article 11(1) regulates the allocation process following the approval of the plan by the Commission. It foresees the implementation of the plan by taking a final national allocation decision at least three months before the beginning of the first trading period. 

The theoretical approach that an aggregate emission ceiling should be determined first, followed by the allocation of allowances to the plants, has only been sketchily implemented in reality. Finally, the ratio between the allocation to individual installations and their historical or expected emissions formed the decisive indicator, towards which the decision-making processes were orientated. Thus, the increase of the emissions ceilings in reality perfectly correlated to the parameters with which additional allocation situations were compensated in their allocation effect. Even if the degree of freedom for such adaptations in the Kyoto period were to be reduced, an early fixing of the cap remains a central challenge for future allocation processes. 

Emissions trading is a radical innovation in environmental policy in Spain, whose introduction was fraught with difficulties. Institutional path dependence theory (see Woerdman 2004) provides useful insights to interpret decisions, choices and conflicts when institutional rigidities exist. On the other hand, a public choice approach is useful for analysing the interaction between the public administration and other actors in the allocation process and some specific choices made (see Schneider and Volkert 1999 Svendsen 2000 del Rio 2006). 

In contrast to the procedures followed by other Member States and recommended by the Commission s guidelines on NAPs, the Italian allocation process did not develop through a two-step top-down approach a first decision on overall allocation based on macro level policy goals which sets the constraints for the following second decision on sector level allocations. The Italian NAP decisions were, instead, intrinsically linked to the GHG National Reduction Plan (NRP) characterised by a one-step bottom-up approach a first-step single decision on... 

In the absence of an obvious or practical benchmark, recent emission levels became the basic reference point for the allocation process in the EU ETS. This was true both for the macro decision on the level of the cap and on the micro distribution of allowances to existing installations within individual Member States. 

European Commission, Benchmarks for free allocation , European Decision, reference Documents and guidelines for calculating allocation of emission rights in different processes. 

Figure 7.3 presents a flowchart depicting the basic allocation process contained within BS/EN/ISO 11064-1 2001. The process recognizes that some tasks have to be allocated either to a machine or to a human, so to that extent they are mandatory allocations. This leaves a set of preliminary allocations in which the criteria above are more fully engaged in order to decide who (or what) is optimal for undertaking a particular task. This then leaves cases in which both humans and machines could perform the task, meaning that the decision process shifts to one based on who (or what) would be preferable. The basic allocation process, therefore, progresses from who has to do a task to who is best suited and, finally, to who would be preferable. Solutions are based on iteration. The outputs of step 2 are as follows ... 

Another way of interpreting absolute risk estimates is through the use of benchmarks or goals. Consider a company that operates 50 chemical process facilities. It is determined (through other, purely qualitative means) that Plant A has exhibited acceptable safety performance over the years. A QRA is performed on Plant A, and the absolute estimates are established as calibration points, or benchmarks, for the rest of the firm s facilities. Over the years, QRAs are performed on other facilities to aid in making decisions about safety maintenance and improvement. As these studies are completed, the results are carefully scrutinized against the benchmark facility. The frequency/consequence estimates are not the only results compared—the lists of major risk contributors, the statistical risk importance of safety systems, and other types of QRA results are also compared. As more and more facility results are accumulated, resources are allocated to any plant areas that are out of line with respect to the benchmark facility. 

The use of the risk-based decision making process allows for efficient allocation of limited resources, such as time, money, regulatory oversight, and qualified professionals. Advantages of using tliis process include ... 

On the upper level, the scheduling module allocates the equipment which is required for processing the next batch. In these decisions, the current equipment allocation, the equipment properties and a cost-function are taken into account. The allocation is performed in a sequence according to increasing starting times of the batches. 

The previous general continuous-time formulations are mostly oriented towards arbitrary network processes. On the other hand, different continuous-time formulations focused their attention on particular features of a wide variety of sequential processes. One of the first contributions following this direction is based on the concept of time slots, which stand for a set of predefined time intervals with unknown durations. The main idea is to postulate an appropriate number of time slots for each processing unit in order to allocate them to the batches to be processed. The definition of the number of time slots required is not a trivial decision and represents an important trade-offbetween optimality and computational performance. Other alternative approaches for sequential processes were developed based on the concept of batch precedence. Model variables defining the processing sequence of batch tasks are explicitly embedded into these formulations and, consequently,... 

Solution. We want to decide how much of crudes 1, 2, and 3 should be used in the fuel process, and how much of crude 4 should be allocated to the fuel and the lube processes so as to maximize the weekly profit. One decision variable exists for the amount (kbbl/wk) of each crude 1, 2, and 3 used in the fuel process. Two variables exist for the amount (kbbl/wk) of crude 4 one for the amount of crude 4 allocated to the fuel process and the other for the amount allocated to the lube process. Denote the variables by xc(c = 1 to 5), where xx through x3 represent the amounts of crudes 1 through 3, x4 represents the crude 4 sent to the fuel process, and x5 represents the crude 4 sent to the lube process. Because the crude supplies are limited, the xc will be constrained by... 

The costs of compliance with pollution abatement regulations have been documented in many company, industry, and Government studies. These costs obviously impact on company growth, investment decisions, and allocation of resources among competing company priorities. Such increased costs of company activities impact on technological innovation in several ways. Upgrading of production processes may be postponed. Investments in facilities... 

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