European Emissions Trading and the International Competitiveness of Energy-Intensive Industries: A Legal and Political Evaluation of Possible Supporting Measures

Energy Policy, Vol. 35, No. 1, pp. 497-506

Posted: 9 Mar 2009

See all articles by Harro van Asselt

Harro van Asselt

Stockholm Environment Institute; University of Eastern Finland

Frank Biermann

VU University Amsterdam - Institute for Environmental Studies (IVM)

Date Written: January 2007

Abstract

The EU Emissions Trading Directive is expected by European energy-intensive industries to harm their competitiveness vis-a-vis non-European competitors. Many additional measures have thus been proposed to 'level the playing field' and to protect the competitiveness of European energy-intensive industries within the larger effort of reducing Europe's greenhouse gas emissions and of meeting its obligations under the 1997 Kyoto Protocol. This article evaluates a range of proposed measures based on a set of political and legal criteria, including environmental effectiveness; the need to consider differentiated commitments, responsibilities and capabilities; conformity with world trade law and European Union law; and Europe's overall political interests. We discuss measures that could be adopted by the European Union and its member states, such as direct support for energy-intensive industries, restrictions of energy-intensive imports into the European Union through border cost adjustments, quotas or technical regulations, and cost reimbursement for affected developing countries. We also analyse measures available to multilateral institutions such as the United Nations Framework Convention on Climate Change and its Kyoto Protocol and the World Trade Organization. We conclude with a classification of the discussed measures with red (unfeasible), yellow (potentially feasible) or green (feasible) labels.

Keywords: Climate governance , European emissions trading ,Trade and climate policy

JEL Classification: Q48

Suggested Citation

van Asselt, Harro and Biermann, Frank, European Emissions Trading and the International Competitiveness of Energy-Intensive Industries: A Legal and Political Evaluation of Possible Supporting Measures (January 2007). Energy Policy, Vol. 35, No. 1, pp. 497-506. Available at SSRN: https://ssrn.com/abstract=1351748

Harro Van Asselt (Contact Author)

Stockholm Environment Institute ( email )

Oxford
United Kingdom

University of Eastern Finland ( email )

PO Box 111
Joensuu, 80100
Finland

Frank Biermann

VU University Amsterdam - Institute for Environmental Studies (IVM) ( email )

De Boelelaan 1115
Amsterdam, 1081 HV
Netherlands

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