01 Feb 2005

Business Consequences of the EU Emissions Trading Scheme

Kyriakos Gialoglou / Noriko Fujiwara / Christian Egenhofer

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This report examines the effects of the EU Emissions Trading Scheme (ETS) on the business environment. While the main focus is the 2008-12 period with possible incremental improvements, the report also takes a strategic perspective by looking beyond 2012. The analysis begins with the question of whether the EU ETS can be expected to achieve the declared objectives to create the necessary incentives for the power and energy-intensive sector for behavioural changes in the short and medium term and to encourage investment in low-carbon generation technologies in the long term. It then asks whether and how both design and implementation might be adapted to improve the EU ETS.