The impact of CO&lt;SUB&gt;2&lt;/SUB&gt; emissions trading on firm profits and market prices

Smale, Robin; Hartley, Murray; Hepburn, Cameron; Ward, John W.; Grubb, Michael

doi:10.3763/cpol.2006.0603

Cited by 99 publications

(76 citation statements)

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“…This assumption holds if we neglect the immaturity of the carbon market and if we suppose optimal behaviour, i.e. firms pursue profitmaximisation, which is debatable (Smale et al, 2006). Even under these conditions, this assumption depends on the allocation method.…”

Section: Modelling Of the Eu Ets Allocation Methodsmentioning

confidence: 99%

“…Oberndorfer, 2006, and references therein) generally conclude to a modest decrease in EU production. Conversely most of these studies do not address the second aspect of competitiveness, i.e., profitability, one exception being Smale et al (2006) who finds a positive impact.…”

Section: Introductionmentioning

confidence: 99%

“…Moreover, the figures provided in the literature for other sectors are much above the expectations of experts or industrials. As such, for the domestic pass-through rate, we apply the methodology developed for a UK cross-sectoral analysis by Smale et al (2006). This derives 75% pass-through for the EU steel sector, an intermediate value between industrial assertions and the previous literature.…”

mentioning

confidence: 99%

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European Emission Trading Scheme and competitiveness: A case study on the iron and steel industry

Demailly¹,

Quirion²

2008

Energy Economics

291

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We quantify the impact of the European Emission Trading Scheme (ETS) on the two dimensions of competitiveness -production and profitability -for the iron and steel industry. Among those covered by the scheme, this sector is one of the most exposed, since it is both highly CO 2 -intensive and relatively open to international trade. We also examine the robustness of these results to various assumptions: marginal abatement cost curve, trade and demand elasticities, as well as pass-through rates and updating of allocation rules, of which the latter two are scarcely debated.We conclude that for this sector, competitiveness losses are small. We prove this conclusion to be robust. Hence arguments against tightening the environmental stringency of the ETS in Phase II are not justified on grounds of competitiveness loss. Our systematic sensitivity analysis allows us to identify the important assumptions for each output variable. It turns out that pass-through rates and updating rules are significant, despite being often implicit and least debated in existing analyses.

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Section: Modelling Of the Eu Ets Allocation Methodsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

mentioning

confidence: 99%

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European Emission Trading Scheme and competitiveness: A case study on the iron and steel industry

Demailly¹,

Quirion²

2008

Energy Economics

291

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“…Also international competition with companies in countries outside the EU emissions trading scheme poses limits to passing on the carbon mark-up to consumers. This is not relevant for the electricity sector, since almost no power is imported from outside the EU, but it is relevant in particular for the aluminium industry (Smale et al 2006).…”

Section: Other Market Factorsmentioning

confidence: 99%

“…Econometric research has confirmed that energy producers partly pass on the market value of freely obtained CO 2 emission rights to energy consumers (e.g. Point Carbon 2008; Smale et al 2006;Frontier Economics 2006;Sijm et al 2005). This was and still is a ''hot item'' in the political and public debate: newspapers and policy magazines all over Europe have written about the windfall profits those companies would make.…”

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confidence: 99%

Energy prices and emissions trading: windfall profits from grandfathering?

2009

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The greenhouse gas emissions trading scheme in the European Union primarily uses grandfathering until 2012, which means that polluters get emission rights free of charge based on their historical emissions. Energy consumers accuse energy producers of making windfall profits by incorporating the market value of those free rights into the energy prices. However, we develop a numerical example to illustrate that the reasoning of the producers is correct. We also explain why this market value is only partly passed on to consumers. We consider various measures and conclude that only auctioning the rights after 2012 nullifies the additional profits. Keywords

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Environmental policy and sustainable development: An empirical study on carbon reduction among Chinese enterprises

Tsai

2018

Corp Soc Responsibility Env

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This study mainly examined the influences of enterprises' carbon reduction behaviors on their sustainable development, and investigated the effects on sustainable development of carbon emission reduction by state-owned enterprises (SOEs) from high-carbon-emission industries in China. Data were coded through a content analysis procedure, followed by regression analysis.Analysis of variance results revealed that SOEs and high-carbon-emission industries emphasize realizing carbon reduction more than do privately owned enterprises and non-high-carbon-emission industries, with significant between-groups differences observed between these enterprises and industries. Regression results indicated that carbon reduction positively and significantly influences corporate sustainable development, suggesting that carbon reduction is beneficial to both the ecological environment and corporate sustainable development. However, carbon reduction negatively yet insignificantly influences the sustainable development of SOEs in industries with high carbon emissions. The empirical findings may serve as a critical reference for China, which is moving toward a low-carbon economy.

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The impact of CO<SUB>2</SUB> emissions trading on firm profits and market prices

Cited by 99 publications

References 0 publications

European Emission Trading Scheme and competitiveness: A case study on the iron and steel industry

European Emission Trading Scheme and competitiveness: A case study on the iron and steel industry

Energy prices and emissions trading: windfall profits from grandfathering?

Environmental policy and sustainable development: An empirical study on carbon reduction among Chinese enterprises

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