Show Summary Details
Restricted access

Unintended Consequences: Climate Change Policy in a Globalizing World

Yda Schreuder

Keywords: cap-and-trade; carbon constraints; carbon leakage; energy-intensive industries; EU emissions trading scheme

Abstract

The cap-and-trade system introduced by the European Union (EU) in order to comply with carbon emissions reduction targets under the United Nations Framework Convention on Climate Change Kyoto Protocol (1997) has in some instances led to the opposite outcome of the one intended. In fact, the ambitious energy and climate change policy adopted by the EU-known as the Emissions Trading Scheme (ETS)-has led to carbon leakage and in some instances to relocation or a shi in production of energy-intensive manufacturing to parts of the world where carbon reduction commitments are not in effect. EU business organizations state that corporate strategies are now directed toward expanding production overseas and reducing manufacturing capacity in the Union due to its carbon constraints. As the EU has been “going-it-alone“ with mixed success in terms of complying with the Kyoto Protocol's binding emissions reduction targets, the net outcome of the ETS market-based climate change policy is more rather than less global CO2 emissions.

Users without a subscription are not able to see the full content. Please, subscribe or log in to access all content.