Carbon leakage is an issue of major interest in both academic and policy debates about the effectiveness of unilateral climate policy addressing global externalities. The debate is particularly salient in Europe, where the EU Emissions Trading System (EU ETS) covers emissions of many traded sectors. In a first step, we review how carbon leakage and the pollution haven effect are defined and identified in the literature. In a second step, we evaluate whether the emission cost introduced by the EU ETS has caused carbon leakage in European manufacturing. We compute trade flows in embodied carbon and value, using GTAP trade and input-output data and administrative data from the EU ETS. We evaluate the effect of four measures of environmental stringency on both net trade flows and bilateral trade flows. We do not find evidence that the EU ETS has caused carbon leakage.JEL codes: F18, Q58, Q54 for valuable comments. All remaining errors are ours.
We examine the impact of a disclosure mandate for greenhouse gas emissions on firms’ subsequent emission levels and financial operating performance. For UK-incorporated listed firms a carbon disclosure mandate was adopted in 2013. Our difference-in-differences design shows that firms affected by the mandate reduced their emissions by about 8% relative to a control group of European firms. At the same time, our tests indicate that the treated firms experienced no significant changes in their gross margins. Taken together, our findings indicate that the reporting mandate had a real effect on the variable to be disclosed without adversely affecting the financial operating performance of the treated firms.
Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. In addition, export and import prices as well as freight rates for individual trading routes, across regions and globally are combined. We find evidence of significant yet incomplete integration. We also find heterogeneous short-term dynamics of individual markets. Furthermore, we examine whether logistics enter coal price dynamics through transportation costs, which are mainly determined by oil prices. Our results suggest that this is generally not the case. Terms of use: Documents in JEL Codes: L11, Q41, C22
The Robert Schuman Centre for Advanced Studies (RSCAS), created in 1992 and directed by Brigid Laffan since September 2013, aims to develop inter-disciplinary and comparative research and to promote work on the major issues facing the process of integration and European society.The Centre is home to a large post-doctoral programme and hosts major research programmes and projects, and a range of working groups and ad hoc initiatives. The research agenda is organised around a set of core themes and is continuously evolving, reflecting the changing agenda of European integration and the expanding membership of the European Union. Climate Policy Research UnitThe Climate Policy Research Unit (CPRU) is a research group within the Robert Schuman Centre for Advanced Studies under the Loyola de Palacio Chair. The goal of the CPRU is to provide a reliable source for information and analysis of EU climate policy and a forum for discussion of research carried out in this area among government officials, academics and industry.The CPRU was established in 2010 at the initiative of Josep Borrell, former President of the EUI and former President of the European Parliament, as a means of providing more focus to European climate policy developments. The director of the CPRU is Denny Ellerman, part-time professor at the RSCAS, and recently retired as a Senior Lecturer from MIT's Sloan School of Management. The CPRU works in collaboration with the energy and regulatory policy research groups of the Florence School of Regulation and Loyola de Palacio Chair and with the Global Governance Programme at the EUI. Starting in 2012, the CPRU has been funded primarily by the European Commission (DG Climate Action).The opinions expressed in this paper are those of the author(s) and do not represent the views of the European University Institute or any of its subsidiary components or those of the European Commission.For more information:http://fsr.eui.eu/CPRU/Index.aspx AbstractThis paper provides an introduction to the EU's Emissions Trading System. As such it provides a discussion of the historical and legal context in which the EU ETS developed and now operates, a presentation of the key performance indicators for the first eight years through the end of the second phase in 2012, and some concluding observations on the system's future. The paper is purposively descriptive to provide background for more analytically oriented articles, as well as to provide a matter-of-fact presentation for readers who wish to learn about or be updated on the progress of the EU ETS.
Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Firms thus face the decision whether to source compliance with the EU ETS within their boundaries or to acquire it through the permit trade. However, a combination of internal abatement, free permit allocation and flexibility to shift the use of their allocation across time creates opportunities to achieve compliance with the EU ETS without entering the permit trade. This paper aims to identify firm-level determinants of participation in and the extent of the permit trade while recognizing the possibility of zero trade flows leading to selection bias if unaccounted-for. We construct a firmlevel dataset incorporating transaction-level information from both EU ETS operator and person holding accounts, thus representing the entire system-wide permit trade by CO 2 emitters. We cover the supply and demand sides of the permit trade, both interfirm and intra-firm, and account for a wide set of firm-level characteristics using firms' balance sheet information. A detailed descriptive analysis documents salient features of the firm-level permit trade. We then jointly model firms' participation and amount decisions while allowing for possible self-selection into trading. Our results suggest that participation in the permit trade is driven by a combination of firm-specific factors existing independently of the EU ETS, such as size, sector and ownership structure, and market-specific characteristics resulting from the firms' inclusion in the EU ETS, such as the value of the firms' free permit endowment and their relative allowance position. We find that amounts traded are mostly driven by market-specific factors. Terms of use: Documents inIn contrast to the literature on the firm-level determinants of the general goods trade we do not find self-selection into trading.JEL Codes: F14, F18, Q54, C34
We examine whether mandatory disclosure of greenhouse gas (GHG) emissions influences companies' GHG emission levels. We identify the disclosure effect by exploiting a mandate requiring UK-incorporated listed companies to disclose information on GHG emissions in their annual reports. Using a difference-indifferences design, we show that disclosing GHG emissions in annual reports reduces emission levels by about 18% over three years. We find that emission reductions primarily occur for first-time mandatory reporters compared to firms who already voluntarily reported GHG information prior to the mandate. Further, we find that the emission reductions are permanent rather than transitory and we obtain stronger results for firms with larger savings potentials. Our effects are robust to various sample specifications, i.e., analysis at the installation-and firm-level, alternative control groups, and propensity score matching.
Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractThe existence of some 2 billion unused EU Allowances (EUAs) at the end of Phase II of the EU's Emissions Trading System (EU ETS) has sparked considerable debate about structural shortcomings of the EU ETS. However, there has been a surprising lack of interest in considering the accumulation of EUAs in light of the theory of intertemporal permit trading, i.e. allowance banking. In this paper we adapt basic banking theory to the case of a linearly declining cap, as is common in greenhouse gas control systems. We show that it is perfectly rational for agents to decrease emissions beyond the constraint imposed by the cap initially, accumulating an allowance bank and then drawing it down in the interest of minimizing abatement cost over time. Having laid out the theory, we carry out a set of simulations for a reasonable range of key parameters, geared to the EU ETS, to illustrate the e¤ects of intertemporal optimization of abatement decisions on optimal time paths of emissions and allowance prices. We conclude that bank accumulation as the result of intertemporal abatement cost optimization should be considered at least a partial explanation when evaluating the current discrepancy between the cap and observed emissions.JEL classi…cation: D92, F18, Q54
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