Technological Progress and Carbon Price Formation: an Analysis of EU-ETS Plants

Anouk Faure and Marc Baudry

No 2021-18, EconomiX Working Papers from University of Paris Nanterre, EconomiX

Abstract: This study investigates the nature of technological progress in six manufacturing industries covered under the EU-ETS, plus the power sector, and its effect on carbon price formation using marginal abatement cost curves. We adopt a technological frontier framework, which we calibrate to input and output data at the plant level from 2013 to 2017, with a directional distance function approach. Our results reveal that most of the time, technological progress resulted in inflating baseline emissions, despite decreasing the carbon intensity of production. In our sample industries, technological progress therefore leads to increase abatement efforts, raising the equilibrium price of carbon.

Keywords: Directed technological change; frontier analysis; EU-ETS (search for similar items in EconPapers)
JEL-codes: D24 L6 O33 Q55 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2021
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.economix.fr/pdf/dt/2021/WP_EcoX_2021-18.pdf (application/pdf)

Related works:
Working Paper: Technological Progress and Carbon Price Formation: an Analysis of EU-ETS Plants (2021)
Working Paper: Technological Progress and Carbon Price Formation: an Analysis of EU-ETS Plants (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:drm:wpaper:2021-18

Access Statistics for this paper

More papers in EconomiX Working Papers from University of Paris Nanterre, EconomiX Contact information at EDIRC.
Bibliographic data for series maintained by Valerie Mignon ( this e-mail address is bad, please contact ).