The aim of this article was to identify challenges of emissions trading that the Polish and CEE Central and Eastern Europe energy industry will face, as well as to indicate key implications for the competitiveness of the companies from the energy sector resulting from that trading. The EU Emissions Trading Scheme (ETS) is the emissions trading system, which results from the EU policy concerning climate change. It is a tool for reducing greenhouse gas emissions (GHG). The system regulates an annual allocation of the allowances. The price of CO2 emission allowances is subject to constant fluctuations because it depends on various macroeconomic factors as well as is an effect of proprietary trading by global investment banks. Polish energy companies have an increasing share in the emission of CO2 in the European market. This is due to the fact that other European countries are rapidly moving away from fossil fuel-fired sources. The cost per MWh related to CO2 price has been growing in the last 10 years from ca. 5 up to 30 EUR/MWh at the beginning of 2021. From an electric power utilities perspective, the ability to set up a proper strategy in trading CO2 will be crucial to be competitive in the wholesale power market. The higher price of CO2 (and electric power) at the domestic market in relation to more green (more renewable energy sources RES in energy mix) surrounding countries translates into a worse competitive position.
Purpose: This paper's research objective was to determine if the scale of outward foreign direct investments (OFDIoutward FDI) from Central and Eastern Europe (CEE) countries is determined by the key home country's institutional factors. Design/Methodology/Approach: To achieve the assumed research aim, an econometric power panel model illustrating the interdependencies between the natural logarithms of the CEE countries' outward FDI per capita stocks values and the levels of natural logarithms of their explanatory variables, which were the key home country's institutional factors, during or at the end of the years 2004-2018, that constituted a balanced data panel, were used. The slope coefficients of the model indicated the percentage change the dependent variable (i.e., the value of the OFDI stocks of CEE countries growth pace) changes if a given exogenous institutional variable decreases or grows by 1.0%, which enables to determine if the scale of outward FDI from the CEE region was significantly determined in the examined period by the considered key home country's institutional factors. Findings: The empirical results show that the home country's institutional factors determine OFDI stocks' scale from the CEE countries. Practical Implications: Improving the quality of the institutional environment of the country of origin of FDI would contribute to increasing the scale of foreign capital expansion of enterprises from the CEE region. Originality/value: The conducted study enabled to indicate the key directions of possible future improvements in the institutional environment of CEE enterprises, which would enable to significantly increase the scale of their foreign capital expansion, which would result in the growth of their exports that in turn would result in their further economic development, which was the case of many other well developed, as well as emerging economies. Such a result would contribute to the significant improvement of the effectiveness of the region's countries' economic and institutional policies in terms of supporting international economic cooperation.
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