Economics at your fingertips  

EU Emissions Trading Scheme, competitiveness and carbon leakage: new evidence from cement and steel industries

Mohamed Amine Boutabba () and Sandrine Lardic ()
Additional contact information
Mohamed Amine Boutabba: Université d’Evry-Val d’Essonne

Annals of Operations Research, 2017, vol. 255, issue 1, No 4, 47-61

Abstract: Abstract The European Union Emissions Trading Scheme (EU ETS) is the world’s first large implementation of a $$\hbox {CO}_{2}$$ CO 2 cap-and-trade system. The possibility that the EU ETS would have adverse effects on sectoral competitiveness is a major concern of policy-makers and industry. This paper analyses whether and to what extent cement and steel industries are exposed to carbon leakage. Prior studies focused on ex-post EU ETS analysis without taking structural breaks into account. Considering this gap in the literature, the present study attempts to provide new empirical evidence on the risk of carbon leakage under the EU ETS. Using rolling cointegration approach, our estimation results reveal that the impact of EU ETS on these two industries varies over time. Indeed, carbon price affects positively the net imports of cement and steel sectors over multiple subperiods, suggesting that these two industries are affected by a negligible carbon leakage and competitiveness losses. However, results reveal that the steel sector is more affected than the cement sector. Policy makers and industry could benefit from the findings of this study that provides a broader understanding of the future role of the EU ETS.

Keywords: EU ETS; Competitiveness; Carbon leakage; Rolling cointegration (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link) Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
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:

Ordering information: This journal article can be ordered from

DOI: 10.1007/s10479-016-2246-9

Access Statistics for this article

Annals of Operations Research is currently edited by Endre Boros

More articles in Annals of Operations Research from Springer
Bibliographic data for series maintained by Sonal Shukla ().

Page updated 2020-08-12
Handle: RePEc:spr:annopr:v:255:y:2017:i:1:d:10.1007_s10479-016-2246-9