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The effect of the EU Emission Trading Scheme on emissions

Author

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  • Bogachev, Anton
  • Venmans, Frank

Abstract

We assess the effect of the EU Emission Trading Scheme (ETS) on emission reductions between 2008 and 2023. To do so, we compare emissions of ETS installations with non-ETS installations of similar size in the same sector and country. We use data in the UK, the Netherlands, France and Norway, because these countries require companies to report CO2 emissions at low levels, which are below the inclusion criteria of the ETS. We find that the ETS has reduced industrial emissions by approximately 12% in the second phase (2008-2012), by 18% in the third phase (2013-2020) and by 41% in the fourth phase (2021-2023). To obtain strong internal validity, our sample focusses on small companies. However, we find that the larger installations in our sample have made slightly larger emission reductions than the smaller companies.

Suggested Citation

  • Bogachev, Anton & Venmans, Frank, 2026. "The effect of the EU Emission Trading Scheme on emissions," LSE Research Online Documents on Economics 138269, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:138269
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    File URL: https://researchonline.lse.ac.uk/id/eprint/138269/
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    References listed on IDEAS

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    1. Massimo Bordignon & Duccio Gamannossi degl’Innocenti, 2023. "Third Time’s a Charm? Assessing the Impact of the Third Phase of the EU ETS on CO 2 Emissions and Performance," Sustainability, MDPI, vol. 15(8), pages 1-21, April.
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    4. Olivier De Jonghe & Klaas Mulier & Glenn Schepens, 2020. "Going green by putting a price on pollution : Firm-level evidence from the EU," Working Paper Research 390, National Bank of Belgium.
    5. Marit Klemetsen & Knut Einar Rosendahl & Anja Lund Jakobsen, 2020. "The Impacts Of The Eu Ets On Norwegian Plants’ Environmental And Economic Performance," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 11(01), pages 1-32, February.
    6. Dechezleprêtre, Antoine & Nachtigall, Daniel & Venmans, Frank, 2023. "The joint impact of the European Union emissions trading system on carbon emissions and economic performance," Journal of Environmental Economics and Management, Elsevier, vol. 118(C).
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    Full references (including those not matched with items on IDEAS)

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    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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