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Three types of impact from the European Emission Trading Scheme: direct cost, indirect cost and uncertainty

In: Economics and Management of Climate Change

Author

Listed:
  • Volker H Hoffmann

    (Department Management, Technology, and Economics)

  • Thomas Trautmann

    (Department Management, Technology, and Economics)

Abstract

The authors identify three types of impact from the European Emission Trading Scheme on the affected companies: direct impact, indirect impact, and uncertainty. While direct impact refers to the cost of buying allowances, indirect impact refers to the increased input factor cost as suppliers price in their emission cost. Uncertainty refers to the limited planning reliability as many details of the regulation are still under negotiation or only last for a few years. Based on a Europe-wide survey, the authors empirically show the relevance and industry dependence of these types of impact to a company’s strategic decisions.

Suggested Citation

  • Volker H Hoffmann & Thomas Trautmann, 2008. "Three types of impact from the European Emission Trading Scheme: direct cost, indirect cost and uncertainty," Springer Books, in: Bernd Hansjürgens & Ralf Antes (ed.), Economics and Management of Climate Change, pages 111-123, Springer.
    • Handle: RePEc:spr:sprchp:978-0-387-77353-7_9
    DOI: 10.1007/978-0-387-77353-7_9
    as

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