Why the EU ETS needs reforming: an empirical analysis of the impact on company investments

Climate Policy

Volumn 14, Issue 5, 2014, Pages 537-558

  Löfgren, Åsa ^a   Wråke, Markus ^b   Hagberg, Tomas ^c   Roth, Susanna ^d  

^a UNIVERSITY OF GOTHENBURG   (Sweden)

^b INTERNATIONAL ENERGY AGENCY   (France)

^c Swedish Agency for Growth Policy Analysis   (Sweden)

^d IVL SWEDISH ENVIRONMENTAL RESEARCH INSTITUTE   (Sweden)

Author keywords

carbon; clean technology; climate change; EU ETS; firm behaviour; investment; technological adoption

Indexed keywords

CARBON EMISSION; CLIMATE CHANGE; DECISION MAKING; ECONOMIC IMPACT; EMISSIONS TRADING; ENERGY POLICY; ENVIRONMENTAL POLICY; ENVIRONMENTAL TECHNOLOGY; EUROPEAN UNION; INDUSTRIAL INVESTMENT; TECHNOLOGY ADOPTION;

SWITZERLAND;

EID: 84911999332     PISSN: 14693062     EISSN: 17527457     Source Type: Journal    
DOI: 10.1080/14693062.2014.864800     Document Type: Article

References (38)

1. Alberola, E., Chevallier, J., & Hèze, B. (2007). Price drivers and structural breaks in European carbon prices 2005–2007. Energy Policy, 36, 787–797. doi: 10.1016/j.enpol.2007.10.029
2. Anderson, S. T., & Newell, R. G. (2002). Information programs for technology adoption: The case of energy-efficiency audits (RFF Discussion Paper 02-58). Washington, DC: Resources for the Future.
3. Askildsen, J. E., Jirjahn, U., & Smith, S. C. (2006). Works councils and environmental investment: Theory and evidence from German panel data. Journal of Economic Behavior and Organization, 60, 346–372. doi: 10.1016/j.jebo.2004.01.006
4. Bowen, F. E., Cousins, P. D., Lamming, R. C., & Faruk, A. C. (2001). The role of supply management capabilities in green supply. Production and Operations Management, 10, 174–189. doi: 10.1111/j.1937-5956.2001.tb00077.x
5. de Bruyn, S., Nelissen, D., Korteland, M., Davidson, M., Faber, J., & van de Vreede, G. (2008). Impacts on competitiveness from EU ETS: An analysis of the Dutch industry. Delft: CE Delft.
6. Burtraw, D., Palmer, K., & Kahn, D. (2010). A symmetric safety valve. Energy Policy, 38, 4921–4932. doi: 10.1016/j.enpol.2010.03.068
7. Cramton, P., & Kerr, S. (2002). Tradeable carbon permit auctions: How and why to auction and not grandfather. Energy Policy, 30, 333–345. doi: 10.1016/S0301-4215(01)00100-8
8. Dixit, A. K., & Pindyck, R. S. (1994). Investment under uncertainty. Princeton, NJ: Princeton University Press.
9. Ellerman, D., & Buchner, B. (2006). Over-allocation or abatement? A preliminary analysis of the EU ETS based on the 2005 emissions data (FEEM Working Paper No. 139.06). Milan: Fondazione Enrico Mattei.
10. Ellerman, D., & Buchner, B. (2007). The European Union emissions trading scheme, origins, allocation, and early results. Review of Environmental Economics and Policy, 1, 66–87. doi: 10.1093/reep/rem003
11. Ellerman, D., Buchner, B., & Carraro, C. (Eds.). (2007). Allocation in the European emissions trading scheme: Rights rents and fairness. Cambridge: Cambridge University Press.
12. EC. (1998). Climate change: Towards an EU Post-Kyoto strategy (Commission Communication to the Council and the Parliament COM (98), 353). Brussels: European Commission.
13. EC. (2001). Proposal for a directive of the European Parliament and of the Council establishing a framework for greenhouse gas emissions trading within the European Community and Amending Council Directive 96/61/EC (23 October). Brussels: European Commission.
14. Frondel, M., Horbach, J., & Rennings, K. (2007). End-of-pipe or cleaner production? An empirical comparison of environmental innovation decisions across OECD countries. Business Strategy and the Environment, 16(8), 571–584. doi: 10.1002/bse.496
15. Goeree, J. K., Palmer, K., Holt, C. A., Shobe, W., & Burtraw, D. (2010). An experimental study of auctions versus grandfathering to assign pollution permits. Journal of the European Economic Association, 8, 514–525. doi: 10.1111/j.1542-4774.2010.tb00522.x
16. Gonzalez, P. (2005). Analysing the factors influencing clean technology adoption: A study of the Spanish pulp and paper industry. Business Strategy and the Environment, 14, 20–37. doi: 10.1002/bse.426
17. Hammar, H., & Löfgren, Å. (2010). Explaining adoption of end-of-pipe solutions and clean technologies – Determinants of firms’ investments for reducing emissions to air in four sectors in Sweden. Energy Policy, 38, 3644–3651. doi: 10.1016/j.enpol.2010.02.041
18. Harrington, W., Morgenstern, R. D., & Nelson, P. (2000). On the accuracy of regulatory cost estimates. Journal of Policy Analysis and Management, 19, 297–317. doi: 10.1002/(SICI)1520-6688(200021)19:2<297::AID-PAM7>3.0.CO;2-X
19. Hoejmose, S., Brammer, S., & Millington, A. (2012). ‘Green’ supply chain management: The role of trust and top management in B2B and B2C markets. Industrial Marketing Management, 41, 609–620. doi: 10.1016/j.indmarman.2012.04.008
20. Hoffman, V. H. (2007). EU ETS and investment decisions: The case of the German electricity industry. European Management Journal, 25, 464–474. doi: 10.1016/j.emj.2007.07.008
21. Hourcade, J.-C., Demailly, D., Neuhoff, K., Sato, M., Grubb, M., Matthes, F., & Graichen, V. (2007). Differentiation and dynamics of EU ETS industrial competitiveness impacts, Climate Strategies series. Paris: CIRED/Cambridge: University of Cambridge Electricity Policy Research Group.
22. IEA. (2013). Tracking Clean Energy Progress. Paris: Organisation for Economic Co-operation and Development/International Energy Agency.
23. Kemp, R., & Pontoglio, S. (2011). The innovation effects of environmental policy instruments – A typical case of the blind men and the elephant? Ecological Economics, 72, 28–36. doi: 10.1016/j.ecolecon.2011.09.014
24. Kerr, S., & Newell, R. (2003). Policy-induced technology adoption: Evidence from the U.S. lead phasedown. Journal of Industrial Economics, 51, 317–343. doi: 10.1111/1467-6451.00203
25. Malueg, D. (1989). Emission credit trading and the incentive to adopt new pollution abatement technology. Journal of Environmental Economics and Management, 16, 52–57. doi: 10.1016/0095-0696(89)90045-4
26. Maynard, L. J., & Shortle, J. S. (2001). Determinants of cleaner technology investments in the U.S. bleached kraft pulp industry. Land Economics, 77(4), 561–576. doi: 10.2307/3146941
27. McDonald, R., & Siegel, D. (1986). The value of waiting to invest. Quarterly Journal of Economics, 101, 707–727. doi: 10.2307/1884175
28. Milliman, S., & Prince, R. (1989). Firm incentives to promote technological change in pollution control. Journal of Environmental Economics and Management, 17, 247–265. doi: 10.1016/0095-0696(89)90019-3
29. Millock, K., & Nauges, C. (2006). Ex post evaluation of an earmarked tax on air pollution. Land Economics, 82, 68–84.
30. Pizer, A. W., Harrington, W., Kopp, R. J., Morgenstern, R. D., & Shih, J. (2002). Technology adoption and aggregate energy efficiency (RFF Discussion Paper No. 02-52). Washington, DC: Resources for the Future.
31. Riksrevisionen. (2009). Bengt Lewin, Efter Skattereformen – En genomgång av svensk skattepolitik 1992–2009. Underlagsrapport till Riksrevisionen (Delrapport 1-v2-2009-12-08). Stockholm: Riksrevisionen.
32. Rogge, K. S., Schneider, M., & Hoffmann, V. H. (2011). The innovation impact of the EU emission trading system – Findings of company case studies in the German power sector. Ecological Economics, 70, 513–523. doi: 10.1016/j.ecolecon.2010.09.032
33. Schmidt, T. S., Schneider, M., Rogge, K. S., Schuetz, M. J. A., & Hoffmann, V. H. (2012). The effects of climate policy on the rate and direction of innovation: A survey of the EU ETS and the electricity sector. Environmental Innovation and Societal Transitions, 2, 23–48. doi: 10.1016/j.eist.2011.12.002
34. 2 emissions trading on firm profits and market prices. Climate Policy, 6, 31–48. doi: 10.1080/14693062.2006.9685587
35. Swedish Energy Agency and Swedish Environmental Protection Agency. (2007a). Styrmedel i Klimatpolitiken, Delrapport i Energimyndighetens och Naturvårdsverkets underlag till Kontrollstation 2008. Stockholm: Naturvårdsverket.
36. Swedish Energy Agency and Swedish Environmental Protection Agency. (2007b). Economic instruments in environmental policy (Report 5678). Stockholm: Naturvårdsverket.
37. Swedish Environmental Protection Agency. (2010). National inventory report 2010 Sweden (submitted under the United Nations Framework Convention on Climate Change and the Kyoto Protocol). Stockholm: Naturvårdsverket.
38. Wråke, M., Burtraw, D., Löfgren, Å., & Zetterberg, L. (2012). What have we learnt from the European Union's emissions trading system? AMBIO, 41, 12–22. doi: 10.1007/s13280-011-0237-2