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The impact of the EU emissions trading system on low-carbon technological change : the empirical evidence

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https://hdl.handle.net/1814/66118
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10.1016/j.ecolecon.2019.06.002
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ISSN
0921-8009; 1873-6106
Issue Date
2019
Type of Publication
Article
Keyword(s)
EU ETS; Low-carbon technological change; Innovation incentives; Free allocation; Empirical evidence
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Citation
Ecological economics, 2019, Vol. 164, Art. 106347, OnlineOnly
[Florence School of Regulation]; [Climate]
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TEIXIDO-FIGUERAS, Jordi, VERDE, Stefano F., NICOLLI, Francesco, The impact of the EU emissions trading system on low-carbon technological change : the empirical evidence, Ecological economics, 2019, Vol. 164, Art. 106347, OnlineOnly, [Florence School of Regulation], [Climate] - https://hdl.handle.net/1814/66118
Abstract
This paper reviews the empirical literature analysing the effects of the EU Emissions Trading System (EU ETS) on low-carbon technological change. The emerging evidence is assessed, with references to both relevant economic concepts and the evolving regulation of the EU ETS through the years. The two most robust indications of the literature are: a) free allocation (grandfathering) tended to hamper low-carbon investments in Phases I (2005-2007) and II (2008-2012), and b) the EU ETS appears to have been relatively more effective in stimulating innovation of low-carbon technologies than their adoption. Importantly, however, a complete general picture of the impact of the EU ETS on low-carbon technological change is missing. The main gap regards the lack of empirical evidence for Phase III (2013- 2020). Especially econometric studies are only few due to the lack of suitable databases accessible to researchers - a problem that the relevant public authorities are urged to address. Thanks to the recent reforms of the EU ETS, the incentives for innovation and adoption of low-carbon technologies are probably stronger today than ever before.
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First published online: 6 July 2019
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Elsevier
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EU LIFE Programme of the European Commission [LIFE15 GIC/IT/000051 LIFE SIDE]
Spanish Government [ECO2016-76866-R]
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