Conference Agenda
Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available).
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Daily Overview |
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Carbon Markets and Green Innovation Location: D-105 Session Chair: Aurelien Saussay, London School of Economics and Political Science (LSE) | |
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Mind the Emission Gap: Policy Stringency Matters for Emission Reductions in the EU ETS 1: University of Edinburgh Business School, United Kingdom; 2: Prometeia SpA We document that firm-level emission reductions under the EU ETS program are strongly influenced by climate policy stringency. We define this stringency as the firm-specific expected compliance gap over time, which in turn is defined as the difference between projected allowances and emissions, adjusted by the allowance price and scaled by sales. By capturing both immediate regulatory pressure and firms’ expectations about future compliance obligations, our stringency measure emerges as a key determinant of firms’ decisions to reduce emissions. Sectoral analyses confirm that policy stringency remains influential across diverse industries, irrespective of financial constraints or technological barriers. We use the sectoral model to assess progress toward the EU’s emission goals by 2030. While the phased reduction of free allowances associated with the Carbon Border Adjustment Mechanism (CBAM) drives emissions reductions in covered sectors, it is insufficient to drive the economy-wide reduction required to meet this goal. Meeting the required regulatory pressure across the economy would entail an immediate carbon price of around euro 125 per tonne. | |