Past Event

Environmental and economic effects of the EU ETS

What is the impact of the EU ETS on carbon emissions and economic performance of regulated companies?

Date: December 6, 2018, 12:30 pm Topic: Energy & Climate

VIDEO & AUDIO RECORDINGS


SUMMARY

This event was chaired by Bruegel’s Senior Fellow Georg Zachmann, and saw the participation of Antoine Dechezleprêtre (Senior Economist, Environment Directorate and Economics Department, OECD), Beatriz Yordi Aguirre (Director for EU and International Carbon Markets, European Commission, DG CLIMA) and Sander de Bruyn (Environmental economics coordinator, CE Delft).

The presentation and discussion focused on the new OECD’s paper investigating the impacts of the European Union Emissions Trading System (EU ETS), Europe’s main climate change policy, on both carbon emissions and economic performance of regulated companies.

The empirical assessment of the EU ETS system attempts to analyse the impact causal impact of EU ETS on carbon emissions and firm performance, making use of highly granular data at the firm level and a complex econometric approach. OECD’s researchers matched the firms which have similar balance-sheet characteristics pre-2005 (e.g. assets and revenues), but are on different sides of the ETS regulation thresholds (e.g. 20 MWh of thermal input for combustion). By exploiting these breaks in data, they could set up a treatment versus control group experiment, and estimate the policy impact via a difference-in-differences methodology.

On the firm-performance they find a significant and positive, significant impact on revenues and fixed assets. They also find that EU ETS provoked a modest reduction in emissions levels, without harming the performance of the firm. The paper leaves a number of questions open for research, which were discussed with the panel and the floor (that included scholars, institution and industry representatives), namely: what are the mechanism that make this transmission possible? What will happen if the carbon price increases? Can we say that, overall, the EU ETS system is working?

One key point of discussion with the Chair Gerorg Zachmann, concerns the distributional effects of climate policies, subject of a new Bruegel Blueprint.

Event notes by Enrico Bergamini

Event materials

Presentation by Antoine Dechezlepretre Slide by Georg Zachmann Presentation by Sander de Bruyn

Schedule

Dec 6, 2018

12:30-13:00

Check-in and lunch

13:00-13:20

Presentation

Antoine Dechezleprêtre, Senior Economist, Environment Directorate and Economics Department, OECD

13:20-14:10

Discussion

Chair: Georg Zachmann, Senior Fellow

Antoine Dechezleprêtre, Senior Economist, Environment Directorate and Economics Department, OECD

Beatriz Yordi Aguirre, Director for EU and International Carbon Markets, European Commission, DG CLIMA

Sander de Bruyn, Environmental economics coordinator, CE Delft

14:10-14:30

Q&A

14:30

End

Speakers

Sander de Bruyn

Environmental economics coordinator, CE Delft

Antoine Dechezleprêtre

Senior Economist, Environment Directorate and Economics Department, OECD

Beatriz Yordi Aguirre

Director for EU and International Carbon Markets, European Commission, DG CLIMA

Georg Zachmann

Senior Fellow

Location & Contact

Bruegel, Rue de la Charité 33, 1210 Brussels

Matilda Sevon

matilda.sevon@bruegel.org

Read article Download PDF More on this topic

Policy Brief

A strategic agenda for the new EU leadership

Memo to the presidents of the European Commission, Council and Parliament. 'A strategic agenda for the new EU leadership' by Maria Demertzis, André Sapir and Guntram Wolff is the first of our 2019 Bruegel memos to the new presidents of the European Commission, Council and Parliament. Focusing on the most important economic questions at EU level, these Bruegel memos are intended to be a strategic to-do list, outlining the state of affairs that will greet the new Commission.

By: Maria Demertzis, André Sapir and Guntram B. Wolff Topic: European Macroeconomics & Governance Date: June 13, 2019
Read about event More on this topic

Past Event

Past Event

Past, present, and future EU trade policy: a conversation with Commissioner Malmström

What was trade policy during the last European Commission? What will be the future of European trade under the next Commission?

Speakers: Cecilia Malmström, André Sapir and Guntram B. Wolff Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 13, 2019
Read article More on this topic More by this author

Podcast

Podcast

Director’s Cut: A strategic agenda for the incoming EU presidents

In this Director’s Cut of ‘The Sound of Economics’, Bruegel’s Guntram Wolff and Maria Demertzis talk through their memo to the new presidents of the European Commission, Council and Parliament, outlining the specific measures that should be implemented in order to tackle the most formidable challenges arising in the next five years.

By: The Sound of Economics Topic: European Macroeconomics & Governance Date: June 12, 2019
Read about event More on this topic

Past Event

Past Event

EU-LAC Economic Forum 2019: New perspectives in turbulent times

The third edition of the EU-LAC Economic Forum.

Speakers: Diego Acosta Arcarazo, Ignacio Corlazzoli, Maria Demertzis, Mauricio Escanero Figueroa, Alicia García-Herrero, Carmen González Enríquez, Bert Hoffmann, Edita Hrdá, Matthias Jorgensen, Juan Jung, Tobias Lenz, Carlos Malamud, J. Scott Marcus, Elena Pisonero, Belén Romana and Guntram B. Wolff Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 11, 2019
Read article More on this topic More by this author

Podcast

Podcast

Backstage: Making the most of climate modelling

Bruegel senior fellow Georg Zachmann interviews Massimo Tavoni, professor at the Politecnico di Milano and director of EIEE, on the purpose of climate and energy models, what they can deliver and what are the most recent developments in their formulation.

By: The Sound of Economics Topic: Energy & Climate Date: June 6, 2019
Read about event More on this topic

Past Event

Past Event

The Ukrainian economy: the way forward after a year of political turbulence

What can Ukraine do to foster economic growth? How can the EU and other international partners help Ukraine with this process?

Speakers: Olena Carbou, Marek Dabrowski, Elena Flores, Ivan Miklos and Hlib Vyshlinsky Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: May 28, 2019
Read about event More on this topic

Past Event

Past Event

How do national energy policies fit into EU decarbonisation plans?

Through considering several different national perspectives, we discuss how to reconcile the EU Climate Strategy targets with national energy and climate policies.

Speakers: Aleksandra Gawlikowska-Fyk, Christian von Hirschhausen, Carole Mathieu and Georg Zachmann Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: May 15, 2019
Read article More by this author

Blog Post

Is an electric car a cleaner car?

An article published by the Ifo Institute in Germany compares the carbon footprint of a battery-electric car to that of a diesel car, and argues a higher share of electric cars will not contribute to reducing German carbon dioxide emissions. Respondents rejected the authors’ calculations as unrealistic and biased, and pointed to a series of studies that conclude the opposite. We summarise the article and responses to it.

By: Michael Baltensperger Topic: Energy & Climate, Innovation & Competition Policy Date: May 13, 2019
Read article More on this topic More by this author

Blog Post

Elections must put Europe on a path to a green future

We are at a pivotal moment for the future of Europe. It is an opportunity to reflect on the fundamental values and visions underlying the European project, and on the future direction of this common journey. Climate change should be at the centre of this reflection.

By: Simone Tagliapietra Topic: Energy & Climate Date: May 8, 2019
Read article More on this topic More by this author

Blog Post

Does attaching environmental issues to trade agreements boost support for trade liberalisation?

This blog post shows that the omission of environmental issues in the new EU-US trade negotiations may make it challenging to pass the trade agreement in the European Parliament. In particular, the inclusion of environmental issues is pivotal to keep the second largest, centre-left S&D group in the pro-trade coalition.

By: Boram Lee Topic: Global Economics & Governance Date: April 24, 2019
Read article More on this topic More by this author

Blog Post

Getting better all the time: The benefits of learning for decarbonisation

The technological development will dramatically impact decarbonisation cost. In this blog post, the author suggests that national decarbonisation strategies should put a special emphasis on the benefits of learning.

By: Georg Zachmann Topic: Energy & Climate Date: April 16, 2019
Read about event More on this topic

Past Event

Past Event

Spitzenkandidaten series: Frans Timmermans

The sixth event in the The Road to Europe - Brussels Briefing Live: Spitzenkandidaten series. The series features the lead candidates for the European Elections of six parties and is jointly organised by Bruegel and the Financial Times in March and April 2019.

Speakers: Mehreen Khan, André Sapir and Frans Timmermans Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: April 11, 2019
Load more posts