EU firms insist carbon caps have not damaged competitiveness

The EU’s high profile emission trading scheme (ETS) has had “minimal” impact
on businesses competitiveness and in some cases has delivered commercial
benefits, according to nine of the largest companies affected by cap-and-trade

That is the conclusion of a report carried out by
The Climate Group think tank and
commissioned by the German
Marshall Fund of the United States
lobby group, which is likely to be seized
upon by US environmental campaigners currently attempting secure support for a
proposed US cap-and-trade scheme modelled on the EU ETS.

The study, entitled
Effects of EU Climate Legislation on Business Competitiveness: a Survey and
, was based on interviews with executives at blue chip firms
that combined account for five per cent of the emissions covered by the ETS. It
found that, to date, initial fears that the scheme would damage the
competitiveness of European firms, contribute to job losses, and encourage some
carbon intensive businesses to leave the EU have proved unfounded.

The firms interviewed, which included energy giant Centrica, an unnamed
global steel manufacturer, a global aluminium producer, and large purchasers of
energy such as Tesco and Johnson and Johnson, said that they had not relocated
their operations, reduced their workforce, or lost market share as a result of
carbon pricing.

A number of executives also said that the introduction of the ETS had been ”
positive” for their business as the need to measure and report on carbon
emissions had allowed them to identify cost effective energy efficiency

Some respondents did voice concerns that the limited impact of the scheme had
been a result of the relatively low price of carbon allowances during the early
phases of the scheme. They also warned that the imminent lowering of the
emission caps from 2013 could encourage some businesses to relocate operations
to regions without carbon constraints, particularly if main competitor countries
fail to implement their own carbon pricing mechanisms.

However, the report found that all of the companies interviewed, including
those more carbon intensive companies, were broadly in favour of the scheme.

Mark Kenber, International Policy Director of The Climate Group and report
co-author, said that the survey provided a valuable counter to those groups in
the US lobbying against the proposed Waxman-Markey climate bill on the grounds
thatthey believe the adoption of a cap-and-trade scheme would lead to loss of
market share and soaring costs for businesses.

“Companies with operations in Europe have made some adjustments since the
introduction of the EU ETS and EU climate policies,” he said. “But concerns
about loss of competitiveness have to date either not materialised or have been
alleviated through policy design.”

Author: James Murray

Posted in: Carbon Trading, Low Carbon News on September 18th by admin

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