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Assessing the impact of the EU ETS using firm level data

This paper investigates the impact of the European Union’s Emission Trading System (EU ETS) at a firm level. Using panel data on the emissions and performance of more than 2000 European firms from 2005 to 2008, we are able to analyse the effectiveness of the scheme. The results suggest that the shift from the first […]

By: , and Date: July 15, 2011

This paper investigates the impact of the European Union’s Emission Trading System (EU ETS) at a firm level. Using panel data on the emissions and performance of more than 2000 European firms from 2005 to 2008, we are able to analyse the effectiveness of the scheme.

The results suggest that the shift from the first phase (2005-2007) to the second phase (2008-2012) had an impact on the emission reductions carried out by firms. The initial allocation also had a significant impact on emission reduction. This challenges the relevance for the ETS of Coase’s theorem (Coase, 1969), according to which the initial allocation of permits is irrelevant for the post-trading allocation of marketable pollution permits.

Finally, we found that the EU ETS had a modest impact on the participating companies’ performance. We conclude that a full auctioning system could help to reduce emissions but could also have a negative impact on the profits of participating companies.

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Assessing the impact of the EU ETS using firm level data

Working Paper

Assessing the impact of the EU ETS using firm level data

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Restoring faith in the ETS

Following a vote by the European Parliament to boost the price of allowances on the EU’s carbon market, Georg Zachmann analyses the debate surrounding the Emmission Trading System (ETS) as a whole. Zachmann believes that "backloading," or witholding the allowances to fight their falling price, is part of a politically charged debate with little economic […]

By: Georg Zachmann Topic: Energy & Climate, Innovation & Competition Policy Date: June 19, 2013
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Georg Zachmann

Backloading – An ineffective economic measure for a good political reason?

Wednesday afternoon will see the fourth vote in the European Parliament (this time again in the environment committee) on a scheme to temporarily reduce the number of allowances available to participants in the EU emissions trading system in order to stabilise dwindling allowance prices. 

By: Georg Zachmann Topic: Energy & Climate, Innovation & Competition Policy Date: June 19, 2013
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Georg Zachmann

Wetten Sie nicht gegen das ETSETT

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By: Georg Zachmann Topic: Energy & Climate, Innovation & Competition Policy Date: June 6, 2013
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Policy Brief

You'd better bet on the ETS

You'd better bet on the ETS

The issue: The European Union's emissions trading system (ETS), introduced in 2005, is the centerpiece of EU decarbonisation efforts and the biggest emissions trading scheme in the world. After a peak in May 2008, the price of ETS carbon allowances started to collapse, and industry, civil society and policymakers began to think about how to ‘repair the ETS’.

By: Georg Zachmann Topic: Energy & Climate Date: April 8, 2013