International Industry Competitiveness, Carbon Leakage, and Approaches to Carbon Pricing

Much of the research that has already been done by Climate Strategies and others on leakage and competitiveness issues remains valid and useful. Those studies have helped to clarify key concepts, produce empirical and modeling results on the implications for specific industries, identify policy tools available to governments and begin to assess the associated trade-offs for governments and business. It has been well established, for instance, that leakage and competitiveness are less of a significant macro-economic issue; rather they are issues for a few specific industries and of course for the design and implementation of cap and trade systems. That recognition underlies the emphasis of this 2010 study on industry-level issues.

There are three ways in which the work undertaken to date is not adequate for the current and prospective needs of government policymakers, business decision-makers and other stakeholders. First, there needs to be more detailed and data-based analysis for an additional few key industries beyond the core sectors already identified as being at risk (steel, cement, aluminium). Second, the oft cited claim that industries are becoming footloose and migrating to pollution havens where climate policy is absent or less stringent needs a rigorous, in-depth academic assessment. Third, the analysis needs to take into account explicitly and thoroughly the implications of the current and anticipated changes in the climate and economic policy environment both in the domestic and international arena.

An initial work package on comparative competitiveness issues aims to build on existing research on regional competitiveness issues further by offering a robust and comprehensive analysis of the available data in Poland, Midwestern States of the USA and Japan and Australia. Based on available existing information, these briefing papers offer up-to-date analysis on the anticipated impact of carbon pricing on competitiveness and GDP in these regions.

The principal questions of the initial work package are:

Why competitiveness concerns are so important from an industry and policymaker viewpoint?
To what extent are the industries in each country exposed to international competitiveness issues as a result of the combination of their energy intensity and trade intensity?
How important are the impacts for the national economy?

Report form the Workshop 18 May 2010, Berlin

Reports

Implementation of an emission trading scheme in Japan: Some food for thought - Working Paper
31 Oct 2011. Author: Stéphanie Monjon (CIRED)

Carbon pricing and its future role for energy-intensive industries - Draft
30 Sep 2011. Author: Susanne Droege

Use of Border Adjustment Measures - a cement sector perspective - Working Paper
26 Sep 2011. Author: Gregory Cook

Investment, Carbon Pricing and Leakage - a cement sector perspective - Working Paper
26 Sep 2011. Author: Gregory Cook

Can China afford to commit to effective carbon pricing policies? - Working Paper
26 Aug 2011. Author: Xin WANG, Ji Feng LI, Ya Xiong ZHANG

Revenue dimension of the EU ETS Phase III - Final Report
12 May 2011. Author: Simone Cooper and Michael Grubb

Revenues Accrued in Phase III of the EU ETS
11 May 2011. Author: Simone Cooper, Michael Grubb & Dora Fazekas

Tackling Leakage in a World of Unequal Carbon Prices - A study for the Greens/EFA Group - Final Report
20 May 2010. Author: Susanne Droege and Simone Cooper

Overview of competitiveness issues in the Midwest
01 Jan 2010. Author: Simone Cooper

Overview of competitiveness issues in Poland
01 Jan 2010. Author: Simone Cooper

Overview of competitiveness issues in Japan
31 Dec 2009. Author: Simone Cooper

Ten (plus one) insights from the EU Emissions Trading Scheme: with reference to emerging systems in Asia - Final Report
10 Nov 2009. Author: Michael Grubb, Misato Sato

Ten (plus one) insights from the EU Emissions Trading Scheme: with reference to emerging systems in Asia - Japanese Executive Summary - Final Report
09 Nov 2009. Author: Michael Grubb, Misato Sato

Climate Policy and Industrial Competitiveness: Ten Insights from Europe on the EU Emissions Trading System - Final Report
03 Aug 2009. Author: Michael Grubb, Thomas L. Brewer, Misato Sato, Robert Heilmayr, Dora Fazekas