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Carbon management: Evidence from case studies of German firms under the EU ETS

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  • Heindl, Peter
  • Lutz, Benjamin

Abstract

This paper examines the management practices of German firms with obligations under the EU Emissions Trading Scheme (EU ETS) based on six structured in-depth interviews with managers of firms from different industries and based on survey data. The paper sheds light on management and trading practices, abatement behaviour, and the impact of the EU ETS on long-term decisions, such as investment decisions or innovative capacity. The aim is to provide information on firm-internal management processes related to the EU ETS and to strengthen intuition for microeconomic consequences of greenhouse gas regulation in a cap-and-trade scheme. The analysis reveals that management practices in the EU ETS are mainly driven by emission levels, firm size, pre-existing management structures and production patterns. While larger emitters (about 100,000 tCO2 per year or larger) are perfectly capable to carry out all relevant tasks, smaller emitters behave more passively due to transaction costs and lower expected return of transactions. Our analysis suggests that institutional responds to regulation should be taken into account for the design of greenhouse gas regulation.

Suggested Citation

  • Heindl, Peter & Lutz, Benjamin, 2012. "Carbon management: Evidence from case studies of German firms under the EU ETS," ZEW Discussion Papers 12-079, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:12079
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    References listed on IDEAS

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    Cited by:

    1. Hintermann, Beat & Ludwig, Markus, 2023. "Home country bias in international emissions trading: Evidence from the EU ETS," Resource and Energy Economics, Elsevier, vol. 71(C).
    2. Brockmann, Karl Ludwig & Heindl, Peter & Löschel, Andreas & Lutz, Benjamin & Schumacher, Jan, 2012. "KfW/ZEW CO2 Barometer 2012: Anreizwirkung des EU-Emissionshandels auf Unternehmen gering – Klimapolitische Regulierung wenig relevant für Standortentscheidungen," KfW/ZEW-CO2-Barometer, ZEW - Leibniz Centre for European Economic Research, number 109796.
    3. Helene Naegele, 2018. "Offset Credits in the EU ETS: A Quantile Estimation of Firm-Level Transaction Costs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 70(1), pages 77-106, May.
    4. Naegele, Helene, 2018. "Offset Credits in the EU ETS: A Quantile Estimation of Firm-Level Transaction Costs," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 70(1), pages 77-106.
    5. Regina A. Betz & Tobias S. Schmidt, 2016. "Transfer patterns in Phase I of the EU Emissions Trading System: a first reality check based on cluster analysis," Climate Policy, Taylor & Francis Journals, vol. 16(4), pages 474-495, May.
    6. Batten, Jonathan A. & Maddox, Grace E. & Young, Martin R., 2021. "Does weather, or energy prices, affect carbon prices?," Energy Economics, Elsevier, vol. 96(C).
    7. Löschel, Andreas & Gallier, Carlo & Lutz, Benjamin & Brockmann, Karl Ludwig & Dieckhöner, Caroline, 2013. "KfW/ZEW CO2 Barometer 2013 – Carbon Edition. The EU Emissions Trading Scheme: Firm Behaviour During the Crisis," KfW/ZEW-CO2-Barometer, ZEW - Leibniz Centre for European Economic Research, number 109797.
    8. Germeshausen, Robert, 2018. "The European Union emissions trading scheme and fuel efficiency of fossil fuel power plants in Germany," ZEW Discussion Papers 18-007, ZEW - Leibniz Centre for European Economic Research.

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    More about this item

    Keywords

    Carbon Management; Emissions Trading; EU ETS;
    All these keywords.

    JEL classification:

    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

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