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The Sustainability Impact of the EU Emissions Trading System on the European Industry

Author

Listed:
  • Raimund Bleischwitz

    (University College London)

  • Katrin Fuhrmann

    (Electrabel, Brussels)

  • Elias Huchler

    (London Business School (LBS))

Abstract
This paper explains the mechanism of the EU Emissions Trading System (ETS) for the greenhouse gas carbon dioxide and explore into its likely sustainability impact on European industry. In doing so, it focuses on energy-intensive industries like cement, steel and aluminium production as well as on the emerging hydrogen economy. The paper concludes that at the moment it is still very inconsistently implemented and has a fairly narrow scope regarding greenhouse gases and involved sectors. It may also give an incentive to relocate for energy-intensive industries. In its current format, the EU ETS does not yet properly facilitate long term innovation dynamics such as the transition to a hydrogen economy. Nevertheless, the EU ETS is foremost a working system that – with some improvements – has the potential to become a pillar for effective and efficient climate change policy that also gives incentives for investment into climate friendly policies.

Suggested Citation

  • Raimund Bleischwitz & Katrin Fuhrmann & Elias Huchler, 2007. "The Sustainability Impact of the EU Emissions Trading System on the European Industry," Bruges European Economic Policy Briefings 17, European Economic Studies Department, College of Europe.
    • Handle: RePEc:coe:wpbeep:17
    as

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    File URL: https://www.coleurope.eu/system/files_force/research-paper/beep17.pdf?download=1
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    References listed on IDEAS

    as
    1. A. Rodriguez-Pose & Riccardo Crescenzi, 2006. "R&D, spillovers, innovatoin systems and the genesis of regional growth in Europe," Departmental Working Papers of Economics - University 'Roma Tre' 0067, Department of Economics - University Roma Tre.
    2. Axel Michaelowa & Sonja Butzengeiger, 2005. "EU emissions trading: navigating between Scylla and Charybdis," Climate Policy, Taylor & Francis Journals, vol. 5(1), pages 1-9, January.
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    6. Carlo Carraro & Christian Egenhofer (ed.), 2003. "Firms, Governments and Climate Policy," Books, Edward Elgar Publishing, number 2785.
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    11. Bleischwitz, Raimund & Fuhrmann, Katrin, 2006. "Introduction to the special issue on `hydrogen' in `Energy Policy'," Energy Policy, Elsevier, vol. 34(11), pages 1223-1226, July.
    12. Alfred Endres & Cornelia Ohl, 2005. "Kyoto, Europe?—An Economic Evaluation of the European Emission Trading Directive," European Journal of Law and Economics, Springer, vol. 19(1), pages 17-39, January.
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    Citations

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    Cited by:

    1. Bleischwitz, Raimund & Bader, Nikolas, 2010. "Policies for the transition towards a hydrogen economy: the EU case," Energy Policy, Elsevier, vol. 38(10), pages 5388-5398, October.
    2. Frédéric Lagneaux & David Vivet, 2009. "The Belgian Iron and Steel Industry in the International Context," Working Paper Document 160, National Bank of Belgium.
    3. Mirzha de Manuel Armendía, 2011. "Market Efficiency in the EU Emissions Trading Scheme. An outlook for the third trading period," Bruges European Economic Research Papers 20, European Economic Studies Department, College of Europe.
    4. Raimund Bleischwitz & Nicolas Bader, 2008. "The Policy Framework for the Promotion of Hydrogen and Fuel Cells in Europe: A Critical Assessment," Bruges European Economic Policy Briefings 19, European Economic Studies Department, College of Europe.
    5. Wang, Feng & Liu, Xiying & Nguyen, Tue Anh, 2018. "Evaluating the economic impacts and feasibility of China's energy cap: Based on an Analytic General Equilibrium Model," Economic Modelling, Elsevier, vol. 69(C), pages 114-126.

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    More about this item

    Keywords

    emissions trading; climate policy; impact assessment.;
    All these keywords.

    JEL classification:

    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • L - Industrial Organization
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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