The European Union's Emissions Trading Scheme (EU ETS) is so far the largest emissions trading system in the world. A rigorous ex post empirical analysis of the scheme is presented. The effect of the scheme on firms' investment decisions in carbonreducing technologies is analysed by using detailed firm-level data from Swedish industry. Based on difference-in-difference estimation as well as a before-after difference estimation, the results reveal that the EU ETS has not had a significant effect on firms' decisions to invest in carbon-mitigating technologies. However, although the EU ETS appears to have no direct effect on investments, it is too early to dismiss the system. Consideration is given to how the EU ETS can realize its potential to become an effective tool in the EU climate and energy policy portfolio. Policy relevanceA thorough analysis and discussion considers the ability of the EU ETS to create strong incentives for investment in carbonreducing measures. The empirical results (using detailed firm-level data from Swedish industry) add to earlier findings in the literature showing the limitations of the EU ETS to influence investments and innovation. This is a critical and pressing issue for policy makers. With even modest reforms such as the back-loading of allowances meeting strong resistance from some Member States, the future of the EU ETS is rightly put in question. A key question is whether the EU ETS can and should be reformed in a way so that it can have a real impact on investments, or whether other policy instruments should take an increasing role for longterm transformation of the energy system.
Scenarios for global developments typically point to a sharp increase in demand for energy as well as for water and land. These developments have a starting point where global ecosystems are already being exploited unsustainably. This has implications for energy systems, which can be designed as more or less water and land‐use intensive. However, evaluating the sustainability of energy systems commonly do not take water and land‐use systems into account. This presents a problem as these three systems—energy, water, land—are intrinsically linked, which provides both barriers and opportunities for these systems' individual as well as collective sustainability. More comprehensive evaluations of energy systems that acknowledge the system interlinkages are therefore needed. This has become known as applying a nexus approach . The idea behind the nexus approach is to increase system synergies and resilience through jointly analyzing ecosystem capacities, drivers for resource use, development objectives, capacities to manage linked systems, and the need for new knowledge. This provides a comprehensive perspective on the restrictions and freedom we have in governing, designing, and using the social, technical, and ecological systems. The article thus presents a nexus approach and provides an understanding of challenges for the sustainability of energy systems from a broad system perspective.
Pledge-and-review is an essential pillar for climate change mitigation up until 2020 under the auspices of the United Nations Framework Convention on Climate Change. In this paper, we build on a survey handed out to participants at the Seventeenth Conference of Parties in 2011 to examine to what extent climate negotiators and stakeholders agree with existing critiques towards pledge-and-review. Among the critique examined, we find that the one most agreed with is that the pledges fall short of meeting the 2 degree target, while the one least agreed with is that pledges are voluntary. We also find that respondents from Annex 1 parties are more critical than respondents from Non-Annex 1 parties. Negotiators display strikingly similar responses regardless of where they are from, while there is a remarkable difference between Annex 1 and Non-Annex 1 environmental non-governmental organizations. We build on these results to discuss the legitimacy of pledge-and-review.
The climate pledges under the Copenhagen Accord have been evaluated by researchers in quantitative terms, but less attention has been provided on insights into what drove countries and what political barriers impeded countries to submit a pledge and the ambitiousness of the pledges. This article therefore highlights what the drivers and barriers are under the Copenhagen Accord and assesses whether the political considerations can be expected to differ from the positions under a binding climate regime under the United Nations Framework Convention on Climate Change. By means of case studies the research finds that the political origin differs and in general views that the Accord is viewed as adding to transparency and legitimacy of the negotiations. Moreover, while the pledges can be viewed as a separate regime, it should be complemented by emissions trading to spur increased ambition. The research also identifies that the pledges are commonly viewed as binding and that barriers are increasingly viewed as drivers seeing that costs of climate action is viewed as lower than inaction.
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