The effectiveness of European Union Emission Trading Scheme in incentivizing innovation and adoption of environmentally friendly technologies.: a qualitative study on energy intensive industries in Europe

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School of Business | Bachelor's thesis
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Date

2018

Department

Mikkelin kampus

Major/Subject

Mcode

Degree programme

(Mikkeli) Bachelor’s Program in International Business

Language

en

Pages

31

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Abstract

Objectives The main objective of this study is to explore the innovation effect of EU ETS in investment and adoption of energy efficient and less polluting technologies, and the adoption of organizational attitudes and perceptions towards the program. The results will be analyzed in the light of Porter Hypothesis. Summary Evidence from two first phases of EU ETS showed evidence of innovation effect on some energy intensive industries. However, the results were scattered and no general conclusions could be made, as some industries face higher costs of emission abatement and are dependent on other heavily polluting industries. There was no distinct support for either “weak” or “strong” versions of Porter Hypothesis. The data was collected from existing literature on EU ETS, its effectiveness and Porter Hypothesis. Conclusions Even though EU ETS has caused energy intensive industries to invest in RD&D actions and new technologies, even the industry-wide results differed, as some agents had adopted emission reduction and objectives of EU ETS from technological to organizational level, whereas there were organizations that had no interest in RD&D investments of less emitting technologies. Also, the role of EU ETS as instigator of technological change cannot be confirmed, and empirical evidence from managerial level discussions showed that perceptions towards the program and its innovation effect were rather negative.

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Thesis advisor

Sillanpää, Mika

Keywords

emission trading, air pollution, environmental policy, EU ETS

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https://urn.fi/URN:NBN:fi:aalto-201809105047

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[kand] Kauppakorkeakoulu / BIZ (Open Access)