Impacts of Carbon Prices on Indicators of Competitiveness

Arlinghaus, Johanna

doi:10.1787/5js37p21grzq-en

Cited by 19 publications

(20 citation statements)

References 34 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…We contribute to the literature by providing a systematic reasoning for why there have been no negative effects on firm level competitiveness due to the EU ETS for Phase I and II. While past literature has already documented close to zero negative effects (Arlinghaus, 2015;Martin et al, 2016), we add to this a careful explanation of the underlying reasons. We discuss the relevance of the different channels also in light of the changes made to the EU ETS in Phase III (2013-2020) and Phase IV (2021-2030), although there is, as yet, no comprehensive ex post evidence for these Phases.…”

Section: Introductionmentioning

confidence: 94%

“…We will now give a brief overview on empirical ex post evaluation studies on the EU ETS. More details on the competitiveness and other firm-level effects of environmental policies can also be found in Venmans (2012), Arlinghaus (2015) and Martin et al (2016).…”

Section: Literature Overview On Competitiveness Effects Of the Eu Etsmentioning

confidence: 99%

“…Surprisingly, the ex post literature on firm-level effects of the EU ETS shows hardly any significant negative impacts on the competitiveness of regulated firms during Phase I and II (for overviews see Arlinghaus, 2015;Martin et al, 2016;Venmans, 2012;also Dechezleprêtre & Sato, 2017;Jaraite & Di Maria, 2016). A cross-sector comparison for the entire European Union shows negligible competitiveness effects (Abrell, Ndoye, & Zachmann, 2011).…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Why does emissions trading under the EU Emissions Trading System (ETS) not affect firms’ competitiveness? Empirical findings from the literature

2018

View full text Add to dashboard Cite

Environmental policies may have important consequences for firms' competitiveness or profitability. For the European Union Emissions Trading System (EU ETS) the empirical literature documents that significant emissions reductions have resulted from it. Surprisingly, however, the literature shows that there have been hardly any concurrent negative effects on firms' competitiveness during the first two phases of the scheme (2005-2012). We show that the main explanations for the absence of negative impacts on competitiveness are a large over-allocation of emissions allowances leading to a price drop and the ability of firms to pass costs onto consumers in some sectors. Cost pass-through combined with free allocation, in turn, partly generated windfall profits. In addition, the relatively low importance of energy costs indicated by their average share in the budgets of most manufacturing industries may have limited the impact of the EU ETS. Finally, small but significant stimulating effects on innovation have been found so far. Several factors suggest that over-allocation is likely to remain substantial in the upcoming periods of the scheme. Therefore, we expect to see no negative competitiveness effects from the EU ETS in Phases III and IV (2013-2030). Key policy insights. Empirical literature on the EU ETS shows that there have been hardly any effects on firms' competitiveness or profitability.. One main explanation is a large over-allocation of emissions allowances leading to a price drop. This reduced incentives for innovation.. Moreover, firms were able to pass costs on to consumers in some sectors which partly generated windfall profits.. Innovation effects have so far been small but positive.. We expect to see no negative competitiveness effects on regulated firms in the near future suggesting that no further reliefs for regulated firms are required.

show abstract

Section: Introductionmentioning

confidence: 94%

Section: Literature Overview On Competitiveness Effects Of the Eu Etsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Why does emissions trading under the EU Emissions Trading System (ETS) not affect firms’ competitiveness? Empirical findings from the literature

2018

View full text Add to dashboard Cite

show abstract

“…Similarly, British Columbia's tax on CO 2 emissions was USD 25 in 2012 (Harrison, 2013) while the shadow price in Canada was USD 107 in the same year. Finally, the EU's Emissions Trading System (ETS) reached prices between USD 0 to 35 between 2006(Arlinghaus, 2015, which is below the estimated CO 2 shadow prices for most European countries in those years.…”

Section: Shadow Price Estimates In the Literaturementioning

confidence: 99%

Environmentally Adjusted Multifactor Productivity

2018

OECD Green Growth Papers

View full text Add to dashboard Cite

“…While these studies do not find any significant negative effects of environmental taxes on firms' competitiveness in the UK and British Columbia, evidence from other countries can improve the understanding of competitiveness effects of environmental taxes. Arlinghaus (2015) provides a more comprehensive review of the few ex post evaluations of competitiveness impacts of environmentally related taxes, also reviewing emission trading schemes. Kozluk and Zipperer (2013) review the relationship between the stringency of environmental policies and productivity growth more broadly.…”

Section: Introductionmentioning

confidence: 99%