The innovation impact of EU emission trading: findings of company case studies in the German power sector
This paper provides a comprehensive analysis of how the European Emission Trading System (EU ETS) as the core climate policy instrument of the European Union has impacted innovation. Towards this end, we investigate the impact of the EU ETS on research, development, and demonstration (RD&D), adoption, and organizational change. In doing so, we pay particular attention to the rela-tive influences of context factors (policy mix, market factors, public acceptance) as well as firm characteristics (value chain position, technology portfolio, size, vision). Empirically, our analysis is based on multiple case studies with 19 power generators, technology providers, and project developers in the German power sector which we conducted from June 2008 until June 2009. We find that the innovation impact of the EU ETS has remained limited so far because of the scheme’s initial lack in stringency and predictability and the relatively greater importance of context factors. Additionally, the impact varies tremendously across technologies, firms, and innovation dimensions, and is most pronounced for RD&D on carbon capture technologies and corporate procedural change. Our analysis suggests that the EU ETS by itself may not provide sufficient incentives for fundamental changes in corporate climate innovation activities at a level adequate for reaching political long-term targets. Based on the study’s findings, we derive a set of policy and research recommendations.
|Date of creation:||2010|
|Date of revision:|
|Contact details of provider:|| Postal: Breslauer Straße 48, D-76139 Karlsruhe|
Web page: http://isi.fraunhofer.de/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David Popp & Richard G. Newell & Adam B. Jaffe, 2009.
"Energy, the Environment, and Technological Change,"
NBER Working Papers
14832, National Bureau of Economic Research, Inc.
- Neuhoff, K. & Keats, K. & Sato, M., 2006.
"Allocation, incentives and distortions: the impact of EU ETS emissions allowance allocations to the electricity sector,"
Cambridge Working Papers in Economics
0642, Faculty of Economics, University of Cambridge.
- Karsten Neuhoff & Kim Keats Martinez & Misato Sato, 2006. "Allocation, incentives and distortions: the impact of EU ETS emissions allowance allocations to the electricity sector," Climate Policy, Taylor & Francis Journals, vol. 6(1), pages 73-91, January.
- Richard G. Newell & Adam B. Jaffe & Robert N. Stavins, 1999.
"The Induced Innovation Hypothesis and Energy-Saving Technological Change,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 114(3), pages 941-975.
- Richard G. Newell & Adam B. Jaffe & Robert N. Stavins, 1998. "The Induced Innovation Hypothesis and Energy-Saving Technological Change," NBER Working Papers 6437, National Bureau of Economic Research, Inc.
- Stavins, Robert & Jaffe, Adam & Newell, Richard, 1998. "The Induced Innovation Hypothesis and Energy-Saving Technological Change," Discussion Papers dp-98-12-rev, Resources For the Future.
- Mazzanti, Massimiliano & Zoboli, Roberto, 2006. "Economic instruments and induced innovation: The European policies on end-of-life vehicles," Ecological Economics, Elsevier, vol. 58(2), pages 318-337, June.
- Vanessa Oltra & Maider Saint Jean, 2005. "Environmental innovation and clean technology: an evolutionary framework," International Journal of Sustainable Development, Inderscience Enterprises Ltd, vol. 8(3), pages 153-172.
- Kemp, René & Pontoglio, Serena, 2011. "The innovation effects of environmental policy instruments — A typical case of the blind men and the elephant?," Ecological Economics, Elsevier, vol. 72(C), pages 28-36.
- Fischer, Carolyn & Newell, Richard G., 2008.
"Environmental and technology policies for climate mitigation,"
Journal of Environmental Economics and Management,
Elsevier, vol. 55(2), pages 142-162, March.
- Fischer, Carolyn & Newell, Richard, 2004. "Environmental and Technology Policies for Climate Mitigation," Discussion Papers dp-04-05, Resources For the Future.
- Kaplan, Sarah & Tripsas, Mary, 2008. "Thinking about technology: Applying a cognitive lens to technical change," Research Policy, Elsevier, vol. 37(5), pages 790-805, June.
- Fagerberg, Jan & Verspagen, Bart, 2009.
"Innovation studies--The emerging structure of a new scientific field,"
Elsevier, vol. 38(2), pages 218-233, March.
- Jan Fagerberg & Bart Verspagen, 2009. "Innovation Studies – the emerging structure of a new scientific field," Working Papers on Innovation Studies 20090104, Centre for Technology, Innovation and Culture, University of Oslo.
- Frondel, Manuel & Horbach, Jens & Rennings, Klaus, 2008.
"What triggers environmental management and innovation? Empirical evidence for Germany,"
Elsevier, vol. 66(1), pages 153-160, May.
- Rennings, Klaus & Horbach, Jens & Frondel, Manuel, 2004. "What Triggers Environmental Management and Innovation? - Empirical Evidence for Germany," RWI Discussion Papers 15, Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI).
- Schleich, Joachim & Rogge, Karoline S. & Betz, Regina, 2008. "Incentives for energy efficiency in the EU Emissions Trading Scheme," Working Papers "Sustainability and Innovation" S2/2008, Fraunhofer Institute for Systems and Innovation Research (ISI).
- Horbach, Jens, 2008. "Determinants of environmental innovation--New evidence from German panel data sources," Research Policy, Elsevier, vol. 37(1), pages 163-173, February.
- A. Denny Ellerman, 2008. "New Entrant and Closure Provisions: How do they Distort?," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 63-76.
- Baumol,William J. & Oates,Wallace E., 1988.
"The Theory of Environmental Policy,"
Cambridge University Press, number 9780521322249.
- Pavitt, Keith, 1984. "Sectoral patterns of technical change: Towards a taxonomy and a theory," Research Policy, Elsevier, vol. 13(6), pages 343-373, December.
- Requate, Till, 2005. "Dynamic incentives by environmental policy instruments--a survey," Ecological Economics, Elsevier, vol. 54(2-3), pages 175-195, August.
- Rehfeld, Katharina-Maria & Rennings, Klaus & Ziegler, Andreas, 2004.
"Integrated Product Policy and Environmental Product Innovations: An Empirical Analysis,"
ZEW Discussion Papers
04-71, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Rehfeld, Katharina-Maria & Rennings, Klaus & Ziegler, Andreas, 2007. "Integrated product policy and environmental product innovations: An empirical analysis," Ecological Economics, Elsevier, vol. 61(1), pages 91-100, February.
- Adam Jaffe & Richard Newell & Robert Stavins, 2002. "Environmental Policy and Technological Change," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 22(1), pages 41-70, June.
- Volker H. Hoffmann & Thomas Trautmann & Jens Hamprecht, 2009. "Regulatory Uncertainty: A Reason to Postpone Investments? Not Necessarily," Journal of Management Studies, Wiley Blackwell, vol. 46(7), pages 1227-1253, November.
- Frondel, Manuel & Horbach, Jens & Rennings, Klaus, 2004. "End-of-Pipe or Cleaner Production? An Empirical Comparison of Environmental Innovation Decisions Across OECD Countries," ZEW Discussion Papers 04-82, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Hoffmann, Volker H., 2007. "EU ETS and Investment Decisions:: The Case of the German Electricity Industry," European Management Journal, Elsevier, vol. 25(6), pages 464-474, December.
- Ahman, Markus & Burtraw, Dallas & Kruger, Joseph & Zetterberg, Lars, 2007. "A Ten-Year Rule to guide the allocation of EU emission allowances," Energy Policy, Elsevier, vol. 35(3), pages 1718-1730, March.
When requesting a correction, please mention this item's handle: RePEc:zbw:fisisi:s22010. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.