Search for current research projectsAdvanced search


Project lead: Klaus Friesenbichler
The EU ETS and Hard-to-abate Manufacturing Industries
Current research studies (work in progress)
Supported by: Anniversary Fund of the Oesterreichische Nationalbank
Study by: Austrian Institute of Economic Research
A cornerstone of green transition policies is the EU Emission Trading Scheme (EU ETS). The policy instrument increases the costs of CO2, thereby exerting a push effect to lower emissions. We empirically study key aspects of the directed technological change literature against the backdrop of the EU ETS and hard-to-abate (HTA) manufacturing industries. These are characterised by scale intensive, continuous production processes and considerable sunk costs related to capital investments. The technologies used are determined by established trajectories that determine the knowledge base and production networks of these companies. This causes substantial path dependence and lock-in situations. The research draws on a multitude of datasets, such as EU ETS data at the plant level, firm performance and patenting information, foreign direct investments, and recipient level information of EU regional funds. The research is highly policy relevant, and addresses questions about the regional distribution of HTA industries in the EU, the breaking-up of technological path dependence, stick (EU ETS) and carrot (co-funding) mechanisms, carbon leakage, and firm performance.
Research group:Industrial, Innovation and International Economics