Past Event

Environmental and economic effects of the EU ETS

What is the impact of the EU ETS on carbon emissions and economic performance of regulated companies?

Date: December 6, 2018, 12:30 pm Topic: Green economy

VIDEO & AUDIO RECORDINGS


SUMMARY

This event was chaired by Bruegel’s Senior Fellow Georg Zachmann, and saw the participation of Antoine Dechezleprêtre (Senior Economist, Environment Directorate and Economics Department, OECD), Beatriz Yordi Aguirre (Director for EU and International Carbon Markets, European Commission, DG CLIMA) and Sander de Bruyn (Environmental economics coordinator, CE Delft).

The presentation and discussion focused on the new OECD’s paper investigating the impacts of the European Union Emissions Trading System (EU ETS), Europe’s main climate change policy, on both carbon emissions and economic performance of regulated companies.

The empirical assessment of the EU ETS system attempts to analyse the impact causal impact of EU ETS on carbon emissions and firm performance, making use of highly granular data at the firm level and a complex econometric approach. OECD’s researchers matched the firms which have similar balance-sheet characteristics pre-2005 (e.g. assets and revenues), but are on different sides of the ETS regulation thresholds (e.g. 20 MWh of thermal input for combustion). By exploiting these breaks in data, they could set up a treatment versus control group experiment, and estimate the policy impact via a difference-in-differences methodology.

On the firm-performance they find a significant and positive, significant impact on revenues and fixed assets. They also find that EU ETS provoked a modest reduction in emissions levels, without harming the performance of the firm. The paper leaves a number of questions open for research, which were discussed with the panel and the floor (that included scholars, institution and industry representatives), namely: what are the mechanism that make this transmission possible? What will happen if the carbon price increases? Can we say that, overall, the EU ETS system is working?

One key point of discussion with the Chair Gerorg Zachmann, concerns the distributional effects of climate policies, subject of a new Bruegel Blueprint.

Event notes by Enrico Bergamini

Event materials

Presentation by Antoine Dechezlepretre Slide by Georg Zachmann Presentation by Sander de Bruyn

Schedule

Dec 6, 2018

12:30-13:00

Check-in and lunch

13:00-13:20

Presentation

Antoine Dechezleprêtre, Senior Economist, Environment Directorate and Economics Department, OECD

13:20-14:10

Discussion

Chair: Georg Zachmann, Senior Fellow

Antoine Dechezleprêtre, Senior Economist, Environment Directorate and Economics Department, OECD

Beatriz Yordi Aguirre, Director, European & International Carbon Markets, European Commission, Directorate General for Climate Action (CLIMA)

Sander de Bruyn, Environmental economics coordinator, CE Delft

14:10-14:30

Q&A

14:30

End

Speakers

Sander de Bruyn

Environmental economics coordinator, CE Delft

Antoine Dechezleprêtre

Senior Economist, Environment Directorate and Economics Department, OECD

Beatriz Yordi Aguirre

Director, European & International Carbon Markets, European Commission, Directorate General for Climate Action (CLIMA)

Georg Zachmann

Senior Fellow

Location & Contact

Bruegel, Rue de la Charité 33, 1210 Brussels

Matilda Sevon

[email protected]

Read article More by this author
 

External Publication

Global Economic Resilience: Building Forward Better

A roadmap for systemic economic reform calling for step-change in global economic governance to increase resilience and build forward better from economic shocks, prepared for the G7 Advisory Panel on Economic Resilience.

By: Thomas Wieser Topic: Global economy and trade, Macroeconomic policy Date: October 14, 2021
Read about event More on this topic
 

Upcoming Event

Oct
20
13:00

Monetary policy in the time of climate change

How does climate change influence monetary policy in the eurozone? What potential monetary policy measures should be taken up to address climate risks?

Speakers: Maria Demertzis, Cornelia Holthausen and Jean Pisani-Ferry Topic: Banking and capital markets Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read about event More on this topic
 

Upcoming Event

Oct
21
14:00

The contribution of hydrogen to European decarbonisation

What role will hydrogen play in Europe's decarbonisation?

Speakers: Alison Conboy, Andrea Pisano and Georg Zachmann Topic: Green economy Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read about event More on this topic
 

Upcoming Event

Oct
28
14:00

Can climate change be tackled without ditching economic growth?

What will be necessary to achieve climate goals and keep growing?

Speakers: Francesco Starace, Simone Tagliapietra and Guntram B. Wolff Topic: Green economy Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read article
 

Opinion

Xi’s pledge on financing coal plants overseas misses point

China’s domestic installation of coal-fired power plants continues at great pace.

By: Alicia García-Herrero and Simone Tagliapietra Topic: Global economy and trade, Green economy Date: October 7, 2021
Read article More on this topic
 

Opinion

The only quick-fix to Europe’s energy price crisis is saving energy

The only thing Europe can quickly do to prevent a potentially difficult winter is to actively promote energy conservation in both the residential and industrial sectors.

By: Simone Tagliapietra and Georg Zachmann Topic: Green economy Date: October 7, 2021
Read article
 

Opinion

Will China use climate change as a bargaining chip?

Beijing shows signs of changing tactics ahead of the COP26 conference.

By: Alicia García-Herrero and Simone Tagliapietra Topic: Global economy and trade, Green economy Date: October 6, 2021
Read about event More on this topic
 

Past Event

Past Event

What is the link between biodiversity loss and financial instability?

Biodiversity loss impacts financial stability. How big is the risk of biodiversity loss for financial institutions?

Speakers: Sylvie Goulard, Romain Svartzman, Guntram B. Wolff and Michael Wilkins Topic: Banking and capital markets Date: October 5, 2021
Read article More on this topic
 

Opinion

Letter: The lesson Europe should learn from the gas crisis

Europe’s gas supply security could more effectively be safeguarded by ensuring that unused alternatives are maintained.

By: Simone Tagliapietra and Georg Zachmann Topic: Green economy Date: October 5, 2021
Read article More by this author
 

Podcast

Podcast

A green fiscal pact

How can the European Union increase green public investment while consolidating budget deficits?

By: The Sound of Economics Topic: European governance, Macroeconomic policy Date: September 29, 2021
Read article More on this topic
 

Opinion

Can climate change be tackled without ditching economic growth?

The ultimate answer to the question on whether climate change can be tackled without ditching economic growth depends on our willingness to step up climate action massively.

By: Klaas Lenaerts, Simone Tagliapietra and Guntram B. Wolff Topic: Green economy Date: September 27, 2021
Read article More on this topic
 

External Publication

Winners and losers of energy and climate policy – How can the costs be redistributed?

Who should bear more and who less of the burden achieving climate policy goals?

By: Gustav Fredriksson and Georg Zachmann Topic: Green economy Date: September 24, 2021
Load more posts