A Blind Eye to Industry-Level Corruption? The Risk of Favouring Domestic Industries in the EU ETS

Brandt, Urs Steiner; Svendsen, Gert Tinggaard
April 2014
Energy & Environment;Apr2014, Vol. 25 Issue 2, p263
Academic Journal
We investigate the risk of favouring domestic industries in the current European Union Emission Trading System (EU ETS). As the EU forms a weak federal structure compared to the US, there is a risk that single countries may free ride on the others by choosing to take a blind eye to industry-level corruption when tempted to favour their own industries. In other words, the optimal level of national cheating may not take into account the external cost it imposes upon other countries and the risk of wide-scale cheating and the possibility of an EU ETS collapse. Such national incentives to cheat correspond to a well-known transnational externality problem from international environmental problems and multiplayer prisoners' dilemma games. Thus, there is a strong need for systematic empirical analysis of whether cheating actually occurs in the EU ETS as predicted by theory.


Related Articles

  • EU emissions trading undermines UK policy. Milne, Roger // Utility Week;1/24/2003, Vol. 19 Issue 4, p5 

    Cites a report warning ministers on the European Union's proposed Emissions Trading Scheme. Impact on elements of existing policies; Challenges in reconciling the scheme with climate policy in Great Britain; Effect of the scheme on electricity prices.

  • Options for Emission Allowance Allocation Under the Eu Emissions Trading Directive. Markus Ă…ihman; Lars Zetterberg // Mitigation & Adaptation Strategies for Global Change;Oct2005, Vol. 10 Issue 4, p597 

    The article investigates four alternative allocation schemes for emission allowances. The investigated schemes are emission-based allocation, production-based allocation with actor-specific emission factors, production-based allocation with benchmarking and production-based allocation based on...

  • ICE platform survives. Zwich, Steve // Futures: News, Analysis & Strategies for Futures, Options & Deri;Jun2006, Vol. 35 Issue 7, p17 

    The article reports that European Union (EU) countries exceeded the carbon emission targets set under the E. U. Emission Trading Scheme. It is reported that futures on carbon emission credit drop by 60% in three days. According to the World Bank, the volumes of cash market emissions allowances...

  • Deal reached on EU ETS reform.  // ENDS (Environmental Data Services);Jun2015, Issue 484, p29 

    The article reports that members of the European Parliament (MEPs) and member nations of the European Union (EU) have agreed on a deal over changes in its emissions trading system (ETS).

  • EU Carbon Prices Sink To New Low, Rebound On Committee Vote. Watson, Frank // Aviation Week & Space Technology;1/2/2012, Vol. 174 Issue 1, p21 

    The article discusses the price of European Union (EU) emission allowances (EUAs) in December 2011. The price of EUAs fell in early December 2011, which the article attributes to the EU economy and sovereign debt crises, but increased at the end of the month after the EU's environment committee...

  • Aviation emission trading survives first legal hurdle. Macrory, Richard // ENDS (Environmental Data Services);Oct2011, Issue 441, p59 

    The author comments on the decision of European Union (EU) Court of Justice Advocate General Juliane Kokott to uphold the legal validity of the extension of the EU emissions trading scheme (ETS) to the aviation industry in 2011. According to U.S. airlines, the scheme violates international law....

  • Flatline on a deadline. Milne, Roger // Utility Week;4/1/2004, Vol. 21 Issue 14, p7 

    Deals with the failure of Great Britain to meet the deadline for implementing the Emissions Trading Scheme of the European Union in 2004. Overview of the National Allocation Plan of the country; Impact of the delay in meeting the deadline, according to a statement from the Department for...

  • electricity. Milne, Roger // MicroScope;1/29/2007, p16 

    This article explains that Germany may have to rethink its energy policy as a result of likely key changes to its allocation procedures for the second phase of the European Union's Emissions Trading Scheme. That was in prospect this week as the German government decided whether to challenge the...

  • Trading NO in the Netherlands.  // Modern Power Systems;Dec2005, Vol. 25 Issue 11, p20 

    The article presents information on the legal policy taken up by the Netherlands to control nitrogen oxide emission. The United States have pioneered the use of trading nitrogen oxide as a means of achieving reduced emissions. The U.S. has had an sulphur dioxide, trading regime in place since...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics