Different measures for carbon leakage prevention across Emissions Trading Systems (ETSs) may distort economic competition between firms. The same is true of competition between jurisdictions if decisions on the location of production plants are concerned. Free allocation of emission allowances responds to a logic of carbon costs compensation. Border carbon adjustments aim at levelling the playing field between domestic firms and their foreign competitors. Direct support to low-carbon innovation aims at enhancing the competitiveness of domestic firms. Any instrument for carbon leakage prevention could produce, depending on its own specific design, competitive distortions that are illegitimate under WTO law or other applicable trade regime. By inducing convergence of allowance prices, ETS linking reduces any internal competitive distortion due to differences in carbon prices. However, given pre-link differences in anti-leakage measures, price convergence can highlight or even exacerbate potential competitive distortions. In a linking context, output-based allocation may amplify or attenuate competitive distortions by interacting with post-link changes in allowance prices. Differences in anti-leakage measures do not preclude linking in a technical sense. However, with time, some harmonization may prove necessary for the political sustainability of the linkage. The actual significance of any competitive distortion always depends on the extent to which firms compete in a market.
In the Commission’s Industrial Carbon Management Strategy it acknowledges the importance of CCUs, and that without it the EU will not succeed in its Green deal and Net Zero ambitions. [...]
The Recast Directive opens the single European railway area to competition. Competition is gradually emerging across the EU but there are obvious asymmetries among Member States, in particular in the [...]
As the 2021 EU urban mobility framework states, Europe is one of the most urbanised regions in the world with a huge variety of cities that are important economic and [...]
For decades, environmental degradation has been the focus of public opinion, academia, research centers, and institutions. This attention is motivated by increasing awareness of the severe ecological and socio-economic problems [...]
This policy brief, written in May 2024, provides an overview of the international carbon market landscape and describes the status quo in terms of the degree of its integration and [...]
The general objective of the report is to map – quantitatively and qualitatively – the main existing policy frameworks and strategies for sustainable development (SD) and sustainability transitions (ST) in [...]
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