The innovation impact of the EU Emission Trading System — Findings of company case studies in the German power sector

By Karoline S. Rogge, Malte H. G. Schneider, V. H. Hoffmann. 2011

350 citations recorded by the source corpus.

This paper provides a detailed analysis of how the European Emission Trading System (EU ETS) as the core climate policy instrument of the European Union has impacted innovation. Towards this end, we investigate the impact of the EU ETS on research, development and demonstration (RD&D), adoption, and organizational change. In doing so, we pay particular attention to the relative influences of context factors (policy mix, market factors and public acceptance) and firm characteristics (value chain position, technology portfolio, size and vision). Empirically, our qualitative analysis is based on multiple case studies with 19 power generators, technology providers and project developers in the German power sector which were conducted in 2008/09. We find that the innovation impact of the EU ETS has remained limited so far because of the scheme's initial lack of stringency and predictability and the relatively greater importance of context factors. Additionally, the impact varies significantly across technologies, firms, and innovation dimensions and is most pronounced for RD&D on carbon capture technologies and organizational changes. Our analysis suggests that the EU ETS on its own may not provide sufficient incentives for fundamental changes in corporate innovation activities at a level which ensures political long-term targets can be achieved.

Subfields: Economics and Econometrics, Global and Planetary Change, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/461e1b08daf56f11613a62bbca6906b24d81cd3a

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Citations in the corpus

The impact of Chinese carbon emission trading scheme (ETS) on low carbon energy (LCE) investment (2016, background): “This has been shown to be the case according to experience from the EU ETS and results from a number of simulation studies (Grubb and Neuhoff, 2006; Hoffman, 2007; Blanco and Rodrigues, 2008; Rogge et al., 2011; Mo et al., 2012; Gulbrandsen and Senqvist, 2013; Löfgren et al., 2014; Mo and Zhu, 2014)”
The impact of environmental policy instruments on innovation: A review of energy and automotive industry studies (2014, background): “In particular, several studies (cf. Johnstone et al., 2010a; Rogge et al., 2011; Yin and Powers, 2010) discuss the influence of stringency (how difficult or expensive it is for market actors to comply) and predictability (how certain and foreseeable the policy signal is).”
Do policy mix characteristics matter for low-carbon innovation? A survey-based exploration of renewable power generation technologies in Germany (2018, background): “In the case of green innovation expectations have been driven largely by policy mixes, with demand pull instruments as well as targets playing a key role (Johnstone et al., 2010; Rogge et al., 2011; Schmidt et al., 2012).”
Policy mixes for sustainability transitions: An extended concept and framework for analysis (2016, background): “study on the policy mix for renewable power generation technologies should expect a supplier-dominated pattern of innovation and thus include technology providers and their innovation activities in the analysis (Rogge et al., 2011c).”