The International Dimension of the EU Emissions Trading System: Bringing the Pieces Together

Verde, Stefano F.; Borghesi, Simone

doi:10.1007/s10640-022-00705-x

Cited by 13 publications

(3 citation statements)

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“…Consequently, national economies were free to pursue mitigation policies without impeding the value creation interests of all business entities, including high-emitting sectors, even if this practically meant no reduction in GHG emissions. Under the Kyoto Protocol, market-based flexibility mechanisms, such as international emissions trading [64], [43], were introduced. Developed economies could exceed internationally agreed emission limits by purchasing "carbon credits" from developing economies that emitted less than their targeted amount of CO2 equivalent.…”

Section: Mitigation Of Major Structural Imbalances: Literature Corner...mentioning

confidence: 99%

Green transition action plan for Serbia: A call for urgent, systemic, comprehensive, and thoughtful action

Đuričin,

Kuč,

Vuksanović-Herceg

2024

Ekonomika preduzeća

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The dominance habit, at the core of human nature, continually pushes people into conflict with each other as well as against nature. This tendency has been exacerbated to the extreme during the period of economic neoliberalism. Since economic neoliberalism has lasted for more than four decades, a great many structural imbalances and anomalies of the economic system have emerged. Consequently, the economy, society, and the entire planet have remained in an unsustainable mode. In contrast to the exponential progress made since the start of economic liberalism, during the period of economic neoliberalism the economy and society entered regression, incapable of capitalizing on the growth potential from the last two industrial revolutions (3IR and 4IR). The economy entered a structural crisis because economic rules and policy platform brutally ignored planetary boundaries and the laws of nature as well. Precisely, without inbuilt corrective mechanisms aimed at mitigating the main fractures of the system, the economy has been floating between simultaneous destructions on the supply and demand side, and finally entered a structural, multi, and permanent crisis, simply, a "permacrisis". Furthermore, external asymmetric shocks, such as climate change, pandemics, and geopolitical disputes, have continuously deepened the fractures of the system and created new ones. In this paper, we intend to argue that when the pieces relevant for the functioning of the planet, envisioned as the "system dynamics" of three layers, cannot fit together, it is necessary to start with the reshuffling of the socio-economic layer, as the root cause of today's major planetary problems not only in the economy and society but also in the physical system and biosphere. The imperative of a new era is that economic rules should respect planetary boundaries and be compatible with the laws of nature, primarily reversibility and evolution. The aforementioned implies the necessity to initiate the transition from a "new normal", actually, abnormal, to a "better normal". Negative rebounds can only be reversed through the creation of a new context capable of internalizing negative externalities resulting from prior development. The ultimate outcome of such a radical change could be the birth of a sustainable (and inclusive) economy, both towards people and nature. The transition from an old to a new system is inevitable to steer the economy and society away from the permacrisis and put it on a sustainable trajectory. If the new economy intends to be in harmony with nature, the related transition could be named the "green transition" or the path back to a green planet as the context in which the seeds of human life were originally nurtured. Following the aforementioned logic, the paper is organized into six parts, excluding the Introduction and Conclusion. In Part 1 and Part 2, our focus will be on the root causes of structural imbalances (and anomalies) within the socio-economic system and the physical system, respectively, in the Anthropocene era. Part 3 presents a literature review of the attempts to mitigate inbuilt structural imbalances of economic neoliberalism. The intention is to address the green transition as a prerequisite for a sustainable economy and society. In Part 4, we delve into the strategic audit of Serbia's economy fact sheet at the outset of the green transition. The starting point in advocating for Serbia's return to a sustainable economy path is to provide an accurate diagnosis of the situation, addressing both macro and micro aspects, including everything in between. Part 5 offers an empirical test of attitudes towards SDGs/ESG sustainability metrics in Serbia's business community. Empirical data suggests a subtle inclination toward the environmentalization of the economy and sustainability-related disclosure. Consequently, in Part 6 we discuss the government's role in preparing the green transition action plan.

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Section: Mitigation Of Major Structural Imbalances: Literature Corner...mentioning

confidence: 99%

Green transition action plan for Serbia: A call for urgent, systemic, comprehensive, and thoughtful action

Đuričin,

Kuč,

Vuksanović-Herceg

2024

Ekonomika preduzeća

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“…By putting a price on carbon emissions, these schemes create a market for reducing greenhouse gases, encouraging investment in cleaner technologies (Semieniuk et al, 2021). For example, the European Union's Emissions Trading System is the largest such scheme, and its success has inspired others around the world (Verde & Borghesi, 2022). The rise of sustainable investment portfolios is yet another aspect of this financial transition.…”

Section: Introductionmentioning

confidence: 99%

Innovations in the Energy Sector as a Powerful Catalyst for Financial Transformations

Strielkowski

2024

MMI

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Conventional wisdom often posits that financial innovations are the primary drivers of energy transitions, facilitating the shift from traditional fossil fuels to renewable sources. However, a nuanced examination of this relationship suggests a reciprocal dynamic where innovations in the energy sector can significantly propel financial transformations. The global pivot towards renewable energy sources necessitates substantial financial investments, thus catalyzing the emergence of novel financial instruments, green bonds, and innovative financing models dedicated to supporting the renewable energy sector. This interdependence between energy transitions and financial innovation reflects the adaptability of financial institutions to the evolving demands of sustainable energy initiatives. As societies increasingly embrace cleaner energy solutions, the financial sector responds by devising inventive strategies to underwrite these transitions. Highlighting the growing academic interest in this symbiotic relationship, the number of publications on energy transitions and financial innovations indexed in the Web of Science database has witnessed a remarkable increase from a mere 10 in 2015 to 113 in 2023, indicating a rapidly increasing field of academic research. This paper presents a comprehensive bibliometric analysis of the existing research literature on the interplay between energy transition and financial innovations. Utilizing a network analysis approach and the VOSviewer software – a tool renowned for its efficacy in uncovering prevailing trends and patterns in interdisciplinary research – the study aims to map out the intellectual landscape of this domain. Our findings elucidate that energy transitions do not merely benefit from financial innovations but can also act as potent drivers of financial change, as evidenced by numerous recent and historical examples. This reciprocal influence underscores the critical role of energy sector advancements in shaping financial practices and instruments. The study’s insights contribute significantly to the understanding of how energy transitions and financial innovations mutually reinforce each other, providing valuable implications for policymakers, investors, and researchers focused on fostering sustainable energy ecosystems and financial market resilience.

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“…The cornerstone of the EU climate change mitigation policy is the EU Emission Trading System (EU ETS) established in 2005. It covers around 11 700 installations in 31 participating countries (EEA 2022) which account for about 40% of the EU's total GHG emissions (Verde and Borghesi 2022). With stricter regulating mechanisms such as the so-called invalidation rule the EU ETS will be further strengthened in the coming years (Bruninx and Ovaere 2022).…”

Section: Introductionmentioning

confidence: 99%

Impacts of national vs European carbon pricing on agriculture

Stepanyan

Heidecke

Osterburg

et al. 2023

Environ. Res. Lett.

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The agricultural sector has the potential to contribute to reaching both global and national climate targets. Lately, frequent discussions emerge among academics as well as policymakers regarding whether the agricultural sector should be subject to carbon pricing under different emission trading systems. Germany has set ambitious climate targets envisaging to reach carbon neutrality by 2045, and the EU plans reaching carbon neutrality by 2050. However, the current GHG emission mitigation trends are not in line with this goal. In this study, we quantitatively analyze the environmental and economic effects of the possible inclusion of the agricultural sector into a carbon pricing scheme, once for Germany only, and second for the EU. Moreover, we evaluate the role of already existing and novel technological mitigation options in the GHG emissions mitigation quest. Our findings demonstrate that even the unilateral action by Germany leads to net agricultural emissions reduction, although, the effect obtained by the EU-wide implementation of carbon pricing in agriculture is fivefold larger. The results also highlight the importance of stimulating the use and transferability of the technological options not only in mitigating GHG emissions but also in alleviating the emission leakage to third countries and easing the economic consequences of such a policy.

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The International Dimension of the EU Emissions Trading System: Bringing the Pieces Together

Cited by 13 publications

References 50 publications

Green transition action plan for Serbia: A call for urgent, systemic, comprehensive, and thoughtful action

Green transition action plan for Serbia: A call for urgent, systemic, comprehensive, and thoughtful action

Innovations in the Energy Sector as a Powerful Catalyst for Financial Transformations

Impacts of national vs European carbon pricing on agriculture

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