Links of corporate energy management strategies in Europe with the European Union emissions trading system and environmental management systems

This paper analyses the interaction of the novel emissions trading directive of the European Union with energy management strategies of European firms and the empirical determinants of corporate energy management activities related to these. After a brief introduction, three generic corporate energy management strategies to address climate change are introduced and discussed. This also takes into account the ‘‘embeddedness’’ of energy management in environmental management systems, which may lead to a policy interaction with the emissions trading directive. The determinants of specific energy management activities linked to the different corporate energy management strategies are subsequently analysed empirically. It is found that especially implementation of environmental management systems has a very positive effect on activities. The paper concludes by discussing the implications of this for the European Union’s emissions trading directive and the interaction of the different empirical determinants for activities and strategies with climate policy initiatives on firms in Europe. In particular, the findings confirm that fostering environmental management systems which achieve emission reductions and the emissions trading directive lead to interaction that increases the allocative efficiency of a system using both environmental policy instruments over one which only uses one of them, i.e. that favourable policy interaction is possible. JEL classification: L19, Q01, Q48