European emissions trading and the international competitiveness of energy-intensive industries: a legal and political evaluation of possible supporting measures

Asselt, Harro van; Biermann, Frank

doi:10.1016/j.enpol.2005.12.013

Cited by 75 publications

(33 citation statements)

References 10 publications

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“…Whereas the European debate on a BA in complement to the EU ETS has been motivated by the non-ratification of the Kyoto Protocol by the United States and the fear not to reach a post-Kyoto agreement (van Asselt and Biermann, 2007), China and the other emerging economies are the source of much of the concern in the US climate policy debate (Committee on Energy and Commerce, 2008). In both cases, the BA would not be applied to all the commercial partners in the same way.…”

Section: Countries Coveredmentioning

confidence: 99%

How to design a border adjustment for the European Union Emissions Trading System?

2010

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Border adjustments are currently discussed to limit the possible adverse impact of climate policies on competitiveness and carbon leakage. We discuss the main choices that will have to be made if the European Union implements such a system alongside with the EU ETS. Although more analysis is required on some issues, on others some design options seem clearly preferable to others. First, the import adjustment should be a requirement to surrender allowances rather than a tax. Second, the general rule to determine the amount of allowances per ton imported should be the product-specific benchmarks that the European Commission is currently elaborating for a different purpose (i.e. to determine the amount of free allowances). Third, this obligation should apply when the exported product is registered at the EU border, and not after the end of the year as is the case for domestic emitters. Fourth, the export adjustment should take the form of a rebate on the amount of allowances a domestic emitter has to surrender. Five, this rebate should equal the abovementioned product-specific benchmarks, not the emissions of the particular exporting plant or firm. Finally, the adjustment does not have to apply to consumer products but mostly to basic products. Keywords AbstractBorder adjustments are currently discussed to limit the possible adverse impact of climate policies on competitiveness and carbon leakage. We discuss the main choices that will have to be made if the European Union implements such a system alongside with the EU ETS. Although more analysis is required on some issues, on others some design options seem clearly preferable to others. First, the import adjustment should be a requirement to surrender allowances rather than a tax. Second, the general rule to determine the amount of allowances per ton imported should be the product-specific benchmarks that the European Commission is currently elaborating for a different purpose (i.e. to determine the amount of free allowances). Third, this obligation should apply when the exported product is registered at the EU border, and not after the end of the year as is the case for domestic emitters. Fourth, the export adjustment should take the form of a rebate on the amount of allowances a domestic emitter has to surrender. Five, this rebate should equal the above-mentioned product-specific benchmarks, not the emissions of the particular exporting plant or firm. Finally, the adjustment does not have to apply to consumer products but mostly to basic products.

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Section: Countries Coveredmentioning

confidence: 99%

How to design a border adjustment for the European Union Emissions Trading System?

2010

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“…Fischer et al (2004), and Ismer andNeuhoff (2004), andBordoff (2008) add an economic perspective. de Cendra (2006) and van Asselt and Biermann (2007) focus on options for incorporating border adjustment into the EU ETS in a manner that could be WTO compatible.…”

Section: Legal Analysis Of Border Adjustmentmentioning

confidence: 99%

Comparing policies to combat emissions leakage: Border carbon adjustments versus rebates

Fischer¹,

Fox²

2012

Journal of Environmental Economics and Management

255

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“…3 However, also these options face different potential legal hurdles in both WTO and EU trade law, but an analysis of those is beyond the scope of this paper (see e.g. van Asselt and Biermann 2007).…”

Section: Introductionmentioning

confidence: 99%

The effectiveness of anti-leakage policies in the European Union: results for Austria

2012

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With the third trading period of the EU emissions trading scheme (EU ETS) starting in 2013, the system of allocating emission allowances will significantly change: In contrast to the previous two trading periods, auctioning of the allowances should now be the rule rather than the exception. Accompanying this policy change, concerns over competitiveness of energy intensive, trade exposed sectors as well as over limited environmental effectiveness via the channel of carbon leakage, have regained prominence. In this paper, we thus explore the impacts of potential EU policies to counter losses in international competitiveness and carbon leakage from the perspective of Austria. Based on numerical simulations with a computable general equilibrium model, we evaluate three policy options: an input subsidy for carbon allowances (thus reflecting the planned partially free allocation mechanism in the third EU ETS phase), a subsidy for domestic production, and an export rebate based on sectoral CO 2 costs. Our results show that each policy has the potential to support domestic production in exposed sectors relative to a full auctioning scenario and thus increase competitiveness. However, none is imperatively effective at reducing Austria's net carbon emissions: while the carbon trade balance is improved and hence leakage declines, the tradability of emission permits within the EU ETS allows CO 2 emissions from Austria's ETS output to increase. A cost benefit analysis indicates that the two policies promoting domestic output and exports are more cost effective than the CO 2 input subsidy.

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European emissions trading and the international competitiveness of energy-intensive industries: a legal and political evaluation of possible supporting measures

Cited by 75 publications

References 10 publications

How to design a border adjustment for the European Union Emissions Trading System?

How to design a border adjustment for the European Union Emissions Trading System?

Comparing policies to combat emissions leakage: Border carbon adjustments versus rebates

The effectiveness of anti-leakage policies in the European Union: results for Austria

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