PS22247 - UK Emissions Trading Scheme Evaluation

***** THIS IS AN AWARD NOTICE, NOT A CALL FOR COMPETITION *****

This procurement is being concluded following a mini competition under the CCS RM6126 Research & Insights DPS

Brief Description of Requirement

The UK Emissions Trading Scheme (UK ETS) Authority requires an evaluation of the UK ETS to understand the effectiveness of the scheme's implementation, the early outcomes of the scheme, and the longer terms impacts of the scheme. The evaluation should also provide wider learning for the future development of the scheme. The scope of this commission covers the first five years of the UK ETS's operation (2021-25), though this does not preclude future evaluation commissions covering future operation periods of the UK ETS.

Due to the wide scope of the UK ETS, its complexity as a cap-and-trade system, and the fact that it was preceded by a similar system (the EU ETS) for over a decade, attributing observed impacts to the operation of the UK ETS is the primary challenge of this evaluation programme. We expect this challenge to be met through a multi-phase, mixed methods theory-based evaluation approach delivered over the next 3 to 4 years.

We ask that bidders put together a tender for an evaluation programme covering: (1) a process evaluation of the implementation and operation of the UK ETS, (2) an outcomes evaluation focusing on the operation of the ETS allowance markets and participant behaviour, and (3) an impact evaluation focussing on the key metrics of emissions reduction and carbon leakage mitigation.

Given the scale and complexity of the work outlined, we propose that it be split into two phases, separated by a break clause: - Phase 1, covering process and outcomes evaluation, as well as preliminary scoping work for the impact evaluation should run from the commission date in 2023 to the end of 2024. - Break clause, providing an opportunity for a reassessment of the scope of contract depending on the outcome of the phase 2 scoping work. - Phase 2, covering impact evaluation