The joint impact of the European Union emissions trading system on carbon emissions and economic performance

Abstract

This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. 2 │ ECO/WKP(2018)63 THE JOINT IMPACT OF THE EUROPEAN UNION EMISSIONS TRADING SYSTEM ON CARBON EMISSIONS AND ECONOMIC PERFORMANCE Unclassified OECD Working Papers should not be reported as representing the official views of the OECD or of its member countries. The opinions expressed and arguments employed are those of the author(s). Working Papers describe preliminary results or research in progress by the author(s) and are published to stimulate discussion on a broad range of issues on which the OECD works.

Do Environmental and Economic Performance Go Together? A Review of Micro-level Empirical Evidence from the Past Decade or So

“…This control group combined with a difference-indifferences estimation allows to estimate the policy's causal impact on installations' emissions and on firms' revenue, assets, profits and employment. Dechezleprêtre et al (2018) find that the EU ETS has led to carbon emission reductions of around -10% between 2005 and 2012 while not having any adverse impact on firms' economic performance. The EU ETS has not had any negative effect on regulated firms' revenue, profits, fixed assets or jobs.…”

“…More recently, Dechezleprêtre et al (2018) combine two sources of data. First, they take carbon emissions data at the installation level from the national Pollutant Release and Transfer Registers (PRTR) from France, Netherlands, Norway and the United Kingdom, complemented with data from the European PRTR.…”

“…In fact, the EU ETS rather seems to have led to an increase of revenues and fixed assets of regulated firmscontrary to what could have been expected. Dechezleprêtre et al (2018) argue that one explanation for these results is that the EU ETS induced regulated firms to increase investmentlikely in carbon-saving technologieswhich, in turn, may have increased productivity.…”

The effect of energy prices and environmental policy stringency on manufacturing employment in OECD countries: Sector- and firm-level evidence

“…Most studies have examined the impact of the European Union Emissions Trading System (EU ETS) on employment. Overall, there is no evidence that the EU ETS might have negatively affected the economic performance of regulated firms (see for example Anger and Oberndorfer (2008[11]); Martin, Muûls and Wagner (2015 [12]); Dechezleprêtre et al (2019 [13])). In the largest study conducted so far covering the whole of Europe for the period 2000-15, Dechezleprêtre, Nachtigall and Venmans (2018 [14]) show that the EU ETS did not affect the employment level of regulated companies negatively, compared to similar but unregulated firms operating in the same sector and country.…”

Carbon pricing design: Effectiveness, efficiency and feasibility

“…Once a policy is introduced, it often persists or is reformed, rather than entirely revoked (Coate and Morris, 1999 [61]). To the extent that this applies to price stability measures, studying combinations of several policy instruments allows insights into how existing policy instruments, e.g.…”