IDEAS home Printed from https://ideas.repec.org/a/sae/engenv/v15y2004i1p69-80.html
   My bibliography  Save this article

Rent-Seeking and Grandfathering: The Case of GHG Trade in the Eu

Author

Listed:
  • Urs Steiner Brandt
  • Gert Tinggaard Svendsen

Abstract

The EU Commission has recently proposed a new directive establishing a framework for greenhouse gas (GHG) emissions trading within the European Union. The idea is to devalue part of the emission quotas in circulation by the year 2012 at latest, so that the EU will meet its Kyoto target level of an 8% GHG reduction. Our main question is whether the final choice of allocation rule can be explained by the role of industrial groups in the policy making process. We answer this question by using rent-seeking theory and by analysing the Green Paper hearing replies from the main industrial groups. In other words, we want to explain and observe how rent-seeking (or lobbyism) affects the design of environmental regulation and energy policy in favour of well-organized industrial interest groups. We argue that some firms are likely to reap a net gain from being regulated by a grandfathered emission trading system. This is so because total costs of emission reduction and lobbyism are likely to be smaller than the total rents from having this type of regulation.

Suggested Citation

  • Urs Steiner Brandt & Gert Tinggaard Svendsen, 2004. "Rent-Seeking and Grandfathering: The Case of GHG Trade in the Eu," Energy & Environment, , vol. 15(1), pages 69-80, January.
    • Handle: RePEc:sae:engenv:v:15:y:2004:i:1:p:69-80
    DOI: 10.1260/095830504322986501
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1260/095830504322986501
    Download Restriction: no
    File URL: https://libkey.io/10.1260/095830504322986501?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Henrik Christoffersen & Gert Tinggaard Svendsen, 2002. "Bureaucratic Tax-Seeking: The Danish Waste Tax," Energy & Environment, , vol. 13(3), pages 355-366, July.
    2. Urs Steiner Brandt & Gert Tinggaard Svendsen, 2001. "Hot air in Kyoto, cold air in The Hague," Working Papers 22/01, University of Southern Denmark, Department of Sociology, Environmental and Business Economics.
    3. Bouwe R. Dijkstra, 1999. "The Political Economy of Environmental Policy," Books, Edward Elgar Publishing, number 1636.
    4. Markussen, Peter & Svendsen, Gert Tinggaard & Vesterdal, Morten, 2002. "The political economy of a tradable GHG permit market in the European Union," Working Papers 02-3, University of Aarhus, Aarhus School of Business, Department of Economics.
    5. Svendsen, Gert Tinggaard, 1999. "U.S. Interest Groups Prefer Emission Trading: A New Perspective," Public Choice, Springer, vol. 101(1-2), pages 109-128, October.
    6. Gert T. Svendsen, 1998. "public choice and environmental regulation," Books, Edward Elgar Publishing, number 1298.
    7. Svendsen, Gert Tinggaard & Christensen, Jan Lien, 1999. "The US SO2 auction: analysis and generalization," Energy Economics, Elsevier, vol. 21(5), pages 403-416, October.
    8. Carsten Daugbjerg & Gert Tinggaard Svendsen, 2001. "Green Taxation in Question," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-59553-8, December.
    9. Gert T. Svendsen, 2003. "The Political Economy of the European Union," Books, Edward Elgar Publishing, number 2621.
    10. Hahn, Robert W & Stavins, Robert N, 1992. "Economic Incentives for Environmental Protection: Integrating Theory and Practice," American Economic Review, American Economic Association, vol. 82(2), pages 464-468, May.
    11. Nicolas Wallart, 1999. "The Political Economy of Environmental Taxes," Books, Edward Elgar Publishing, number 1876.
    12. Cropper, Maureen L & Oates, Wallace E, 1992. "Environmental Economics: A Survey," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 675-740, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Philipp Pattberg & Cille Kaiser & Oscar Widerberg & Johannes Stripple, 2022. "20 Years of global climate change governance research: taking stock and moving forward," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 22(2), pages 295-315, June.
    2. Claudia Kemfert & Friedrich Schneider, 2009. "Der Emissionshandel in Deutschland und Österreich – ein wirksames Instrument des Klimaschutzes?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 10(1), pages 92-122, February.
    3. Ashwin Rode, 2021. "Rent Seeking over Tradable Emission Permits," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 78(2), pages 257-285, February.
    4. Sven Rudolph & Friedrich Schneider, 2011. "Did the Japanese Patient Follow the Doctor's Orders? Mostly no! A Public Choice Analysis of Greenhouse Gas Emissions Trading Schemes in Japan before and after the Earthquake," CESifo Working Paper Series 3639, CESifo.
    5. Markus Pasche, 2013. "What Can be Learned from Behavioural Economics for Environmental Policy?," Jena Economics Research Papers 2013-020, Friedrich-Schiller-University Jena.
    6. Urs Steiner Brandt & Gert Tinggaard Svendsen, 2009. "The Choice between Auctioning and Grandfathering in the Eu," Energy & Environment, , vol. 20(7), pages 1117-1130, November.
    7. Andrea Kollmann & Friedrich Schneider, 2010. "Why Does Environmental Policy in Representative Democracies Tend to Be Inadequate? A Preliminary Public Choice Analysis," Sustainability, MDPI, vol. 2(12), pages 1-25, November.
    8. Urs Steiner Brandt & Gert Tinggaard Svendsen, 2003. "The Political Economy of Climate Change Policy in the EU: Auction and Grandfathering," Working Papers 51/03, University of Southern Denmark, Department of Sociology, Environmental and Business Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Svendsen, Gert Tinggaard & Vesterdal, Morten, 2003. "How to design greenhouse gas trading in the EU?," Energy Policy, Elsevier, vol. 31(14), pages 1531-1539, November.
    2. Morten Vesterdal & Gert Tinggaard Svendsen, 2003. "EU Emission Trading: Starting with Carbon Dioxide," Energy & Environment, , vol. 14(4), pages 397-406, July.
    3. Wallace E. Oates & Paul R. Portney & Wallace E. Oates & Paul R. Portney, 2004. "The Political Economy of Environmental Policy," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 1, pages 3-30, Edward Elgar Publishing.
    4. Gullberg, Anne Therese, 2008. "Lobbying friends and foes in climate policy: The case of business and environmental interest groups in the European Union," Energy Policy, Elsevier, vol. 36(8), pages 2954-2962, August.
    5. Markussen, Peter & Svendsen, Gert Tinggaard & Vesterdal, Morten, 2002. "The political economy of a tradable GHG permit market in the European Union," Working Papers 02-3, University of Aarhus, Aarhus School of Business, Department of Economics.
    6. Svendsen, Gert Tinggaard & Daugbjerg, Carsten & Hjollund, Lene & Pedersen, Anders Branth, 2001. "Consumers, industrialists and the political economy of green taxation: CO2 taxation in OECD," Energy Policy, Elsevier, vol. 29(6), pages 489-497, May.
    7. Urs Steiner Brandt & Gert Tinggaard Svendsen, 2003. "Hot Air as an Implicit Side Payment Arrangement: Could a Hot Air Provision have Saved the Kyoto-Agreement?," Working Papers 42/03, University of Southern Denmark, Department of Sociology, Environmental and Business Economics.
    8. Jesper Krogstrup & Gert Tinggaard Svendsen, 2004. "Can the Eu Persuade the Us to Rejoin the Kyoto Agreement?," Energy & Environment, , vol. 15(3), pages 427-435, July.
    9. Henrik Christoffersen & Gert Tinggaard Svendsen, 2002. "Bureaucratic Tax-Seeking: The Danish Waste Tax," Energy & Environment, , vol. 13(3), pages 355-366, July.
    10. Urs Steiner Brandt & Gert Tinggaard Svendsen, 2014. "A Blind Eye to Industry-Level Corruption? The Risk of Favouring Domestic Industries in the EU ETS," Energy & Environment, , vol. 25(2), pages 263-279, April.
    11. Brandt, Urs Steiner & Svendsen, Gert Tinggaard, 2002. "Hot air in Kyoto, cold air in The Hague--the failure of global climate negotiations," Energy Policy, Elsevier, vol. 30(13), pages 1191-1199, October.
    12. Brandt, Urs Steiner & Svendsen, Gert Tinggaard, 2006. "Climate change negotiations and first-mover advantages: the case of the wind turbine industry," Energy Policy, Elsevier, vol. 34(10), pages 1175-1184, July.
    13. Vaughan, William J. & Ardila, Sergio, 1993. "Economic Analysis of the Environmental Aspects of Investment Projects," IDB Publications (Working Papers) 6300, Inter-American Development Bank.
    14. Parry, Ian & Pizer, William & Fischer, Carolyn, 2000. "How Important is Technological Innovation in Protecting the Environment?," RFF Working Paper Series dp-00-15, Resources for the Future.
    15. Daugbjerg, Carsten & Svendsen, Gert Tinggaard, 2001. "Designing green taxes in a political context: From optimal to feasible environmental regulation," Working Papers 01-17, University of Aarhus, Aarhus School of Business, Department of Economics.
    16. Harstad, Bård & Eskeland, Gunnar S., 2010. "Trading for the future: Signaling in permit markets," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 749-760, October.
    17. Hahn, Robert W., 2000. "The Impact of Economics on Environmental Policy," Journal of Environmental Economics and Management, Elsevier, vol. 39(3), pages 375-399, May.
    18. Lene Hjøllund & Gert Tinggaard Svendsen, 2001. "Why Green Taxation?," Energy & Environment, , vol. 12(1), pages 29-38, January.
    19. Willem Heijman & Mordechai Shechter, 1993. "Introduction," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 3(3), pages 217-220, June.
    20. Iskandar, Deden Dinar & Wuenscher, Tobias & Badhuri, Anik, 2012. "The Determinants of Compliance on Environmental Tax: The Insights of Theoretical and Experimental Approaches Motivated by the Case of Indonesia," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK 134977, Agricultural Economics Society.

    More about this item

    Keywords

    Rent-seeking; lobbyism; grandfathering; greenhouse gases; Kyoto Protocol; emission trading; EU;
    All these keywords.

    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H4 - Public Economics - - Publicly Provided Goods

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:engenv:v:15:y:2004:i:1:p:69-80. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.