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The European Union Emission Trading System and technological change: The case of the Italian pulp and paper industry

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  • Fontini, Fulvio
  • Pavan, Giulia

Abstract

We evaluate the contribution of technological change in reducing CO2 emissions in the Italian pulp and paper industry during the first and second phases of application of the European Union Emission Trading System (EU-ETS). We decompose the variation in emission and emission intensity into three different types of effects: a composition effect, a technique effect and a scale effect. The composition effect measures the change in emissions and emissions intensity due to a shift in production towards products that cause less emissions. The technique effect measures the change per each type of product, thereby accounting for technology improvements in the production of each type of good produced. The scale effect singles out the reduction in total emission due to an overall reduction in output. We show that the first phase of the application of EU-ETS has led to a reduction in both emissions and emission intensity due to the composition effect. The technological change has had a limited negative impact on emissions in the first phase, while in the second phase there has been limited technology improvement in the industry. However, the figures of the scale effect show that the larger reduction in emission is due to the overall decrease in output.

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  • Fontini, Fulvio & Pavan, Giulia, 2014. "The European Union Emission Trading System and technological change: The case of the Italian pulp and paper industry," Energy Policy, Elsevier, vol. 68(C), pages 603-607.
    • Handle: RePEc:eee:enepol:v:68:y:2014:i:c:p:603-607
    DOI: 10.1016/j.enpol.2013.12.020
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    References listed on IDEAS

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    1. Stephen Lecourt, 2013. "EU ETS Phase 3 Benchmarks - Implications and Potential Flaws," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
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    1. Bel, Germà & Joseph, Stephan, 2018. "Policy stringency under the European Union Emission trading system and its impact on technological change in the energy sector," Energy Policy, Elsevier, vol. 117(C), pages 434-444.
    2. Meleo, Linda, 2014. "On the determinants of industrial competitiveness: The European Union emission trading scheme and the Italian paper industry," Energy Policy, Elsevier, vol. 74(C), pages 535-546.
    3. Bel, Germà & Joseph, Stephan, 2018. "Climate change mitigation and the role of technological change: Impact on selected headline targets of Europe's 2020 climate and energy package," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 3798-3807.
    4. Samuel A Sarkodie & Evans B Ntiamoah & Dongmei Li, 2019. "Panel heterogeneous distribution analysis of trade and modernized agriculture on CO2 emissions: The role of renewable and fossil fuel energy consumption," Natural Resources Forum, Blackwell Publishing, vol. 43(3), pages 135-153, August.
    5. Shan Yu & Qiang Hou & Jiayi Sun, 2020. "Investment Game Model Analysis of Emission-Reduction Technology Based on Cost Sharing and Coordination under Cost Subsidy Policy," Sustainability, MDPI, vol. 12(6), pages 1-19, March.
    6. Jianwen Zhang & Jacob Cherian & Ashak Mahmud Parvez & Sarminah Samad & Muhammad Safdar Sial & Mohammad Athar Ali & Mohammed Arshad Khan, 2022. "Consequences of Sustainable Agricultural Productivity, Renewable Energy, and Environmental Decay: Recent Evidence from ASEAN Countries," Sustainability, MDPI, vol. 14(6), pages 1-13, March.
    7. Teixidó, Jordi & Verde, Stefano F. & Nicolli, Francesco, 2019. "The impact of the EU Emissions Trading System on low-carbon technological change: The empirical evidence," Ecological Economics, Elsevier, vol. 164(C), pages 1-1.
    8. Muhammad Azhar Bhatti & Snober Fazal, 2021. "Impact of Modernized Agriculture and Trade on Carbon Emissions: The Role of Fossil Fuel and Renewable Energy Consumption Evidenced from ASEAN States," iRASD Journal of Energy and Environment, International Research Association for Sustainable Development (iRASD), vol. 2(2), pages 55-66, December.
    9. Germà Bel & Stephan Joseph, 2015. "“Certificate Oversupply in the European Union Emission Trading System and its Impact on Technological Change”," IREA Working Papers 201520, University of Barcelona, Research Institute of Applied Economics, revised Sep 2015.
    10. Meyer Andrew & Pac Grzegorz, 2015. "How Responsive Are EU Coal-Burning Plants to Changes in Energy Prices?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(3), pages 1481-1506, July.
    11. Martínez Arranz, Alfonso, 2015. "Carbon capture and storage: Frames and blind spots," Energy Policy, Elsevier, vol. 82(C), pages 249-259.

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