Analysis of Carbon Leakage under Phase III of the EU Emissions Trading System: Trading Patterns in the Cement and Aluminium Sectors

Sean Healy, Katja Schumacher and Wolfgang Eichhammer
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Sean Healy: Oeko-Institut, 10179 Berlin, Germany
Katja Schumacher: Oeko-Institut, 10179 Berlin, Germany
Wolfgang Eichhammer: Fraunhofer Institute for Systems and Innovation Research ISI, 76139 Karlsruhe, Germany

Energies, 2018, vol. 11, issue 5, 1-25

Abstract: This paper contributes to the existing literature on carbon leakage by using a range of different publically available datasets in order to develop a systematic approach for identifying whether products are potentially at risk of carbon leakage. The scope of this paper focuses on the cement and aluminium sectors at different levels of product aggregation to demonstrate the variation in trade patterns that exist over time. The evolution of EU-28 trade flows with third countries for these sectors between 2000 and 2016 enables the selection of key third countries that could warrant further investigation via more quantitative techniques in order to determine the impact of carbon pricing on trade patterns. This systematic approach could be replicated for additional sectors in further research as part of a more regular assessment to provide evidence of carbon leakage for European industry. No evidence of carbon leakage is found in this paper for clinker and cement, while there is no conclusive evidence for unwrought non-alloyed aluminium and aluminium products.

Keywords: carbon leakage; emission trading; aluminium; cement; trade (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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