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ETCLIP – The Challenge of the European Carbon Market: Emission Trading, Carbon Leakage and Instruments to Stabilise the CO2 Price. Carbon Leakage from the EU's Energy-Intensive Industries – A Study of Steel, Cement and Pulp & Paper

Author

Listed:
  • Simone Cooper
  • Susanne Dröge

    (Climate Strategies)

Abstract

The European Commission has assessed in 2009 the sectors that will be covered under the Phase III of the EU emissions trading scheme (EU ETS) in order to estimate the impact from unilateral carbon pricing on the environmental effectiveness of the EU ETS. It has identified 164 sectors being at "risk of carbon leakage". There are, however, analytical difficulties with correctly identifying sectors at risk. Using only quantitative criteria like cost impact and trade intensity leads to too broad results. Qualitative assessments focusing on those sectors with the highest share in carbon emissions under the EU cap could instead offer a better understanding of the nature of the risk of leakage. This study offers an example of an in-depth analysis to identify the scale and nature of the risk of carbon leakage. It investigates the European steel, cement and pulp and paper industries.

Suggested Citation

  • Simone Cooper & Susanne Dröge, 2011. "ETCLIP – The Challenge of the European Carbon Market: Emission Trading, Carbon Leakage and Instruments to Stabilise the CO2 Price. Carbon Leakage from the EU's Energy-Intensive Industries – A Study of," WIFO Studies, WIFO, number 43106.
    • Handle: RePEc:wfo:wstudy:43106
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    References listed on IDEAS

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    1. Morgenstern, Richard D. & Ho, Mun & Shih, J.-S.Jhih-Shyang & Zhang, Xuehua, 2004. "The near-term impacts of carbon mitigation policies on manufacturing industries," Energy Policy, Elsevier, vol. 32(16), pages 1825-1841, November.
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