Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/310343 
Year of Publication: 
2024
Series/Report no.: 
NBB Working Paper No. 461
Publisher: 
National Bank of Belgium, Brussels
Abstract: 
We collect data on 24,000 state aid cases within the European Union to create granular measures of national environmental support and study their interactions with the European Union Emissions Trading System (EU ETS). Exploiting variation in regulated installations' exposure to carbon prices and an unexpected regulatory tightening of the EU ETS, we show that high exposed installations strongly reduced emissions relative to less exposed installations in the same industry with significant heterogeneity across countries and industries. In the power sector, emission reductions are significantly stronger in countries with more generous renewable energy support policies. In contrast, emission reductions in the manufacturing sector are significantly weaker in country-industries with more generous cost compensation for energy-intensive activities.
Subjects: 
Cap-and-trade
Climate policy
Overlapping policies
EU ETS
JEL: 
D22
H23
L52
L98
Q48
Q54
Q58
Document Type: 
Working Paper

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