Understanding the Competitiveness Implications of Future Phases of EU ETS on the Industrial Sectors

81 Pages Posted: 27 Jul 2010

See all articles by Ulrich Oberndorfer

Ulrich Oberndorfer

ZEW – Leibniz Centre for European Economic Research

Viktoria Alexeeva-Talebi

ZEW – Leibniz Centre for European Economic Research

Andreas Löschel

University of Muenster - Chair of Microeconomics, esp. Energy and Resource Economics

Date Written: 2010

Abstract

In making key decisions for the future phases of the European Union Emissions Trading Scheme (EU ETS), policy makers need to fully understand the competitiveness implications of these decisions on industrial sectors. In this paper, we conduct an empirical analysis of cost pass-through ability of producers of selected products within the sectors refineries, glass, chemicals and ceramics of the UK economy. Our results provide new insights into the debate on the ability of pass-through of costs generated by the EU ETS. They suggest that some of the sectors analysed have the ability to pass-through a portion of their carbon costs to the consumers: The UK sectors are not capable to completely pass-through their costs into output prices, with the exception of UK ceramic goods.

Keywords: Emissions Trading, Competitiveness, Cost Pass-Through

JEL Classification: C22, D40, H23

Suggested Citation

Oberndorfer, Ulrich and Alexeeva-Talebi, Viktoria and Löschel, Andreas, Understanding the Competitiveness Implications of Future Phases of EU ETS on the Industrial Sectors (2010). ZEW - Centre for European Economic Research Discussion Paper No. 10-044, Available at SSRN: https://ssrn.com/abstract=1649445 or http://dx.doi.org/10.2139/ssrn.1649445

Ulrich Oberndorfer (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Viktoria Alexeeva-Talebi

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Andreas Löschel

University of Muenster - Chair of Microeconomics, esp. Energy and Resource Economics ( email )

Universitätsstr. 14-16
48143 Munster
Germany

HOME PAGE: http://www.wiwi.uni-muenster.de/eroe

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