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

Peter Heindl and Benjamin Lutz

No 12-079, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

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.

Keywords: Carbon Management; Emissions Trading; EU ETS (search for similar items in EconPapers)
JEL-codes: L60 M11 Q50 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-agr, nep-bec, nep-ene, nep-env, nep-eur and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:12079

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