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Journal Articles Recherches Economiques de Louvain - Louvain economic review Year : 2014

Lobbying for carbon permits in Europe

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Abstract

Using cross-sector and cross-country data, this paper evidences that rent seeking influenced the allocation of CO 2 emission permits in the two first phases of the European emissions trading scheme. Industry lobbies effectively used the ?job loss? and ?competitiveness? arguments, as unemployment proxy variables significantly impacted the allocation in both phases, and carbon intensity influenced it in the second phase. The countries that adopted a partial auction scheme also gave relatively more permits and in particular to the politically more powerful sectors. This suggests a compensation mechanism and supports the assumption of a political tradeoff between the quantity of permits issued and the decision between free grant and auction. It also confirms that the initial allocation is not neutral in the presence of special interest lobbying. JEL Classification: D72, Q58, C10.

Dates and versions

hal-01474275 , version 1 (22-02-2017)

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Julien Hanoteau. Lobbying for carbon permits in Europe. Recherches Economiques de Louvain - Louvain economic review, 2014, 80 (1), pp.61-87. ⟨10.3917/rel.801.0061⟩. ⟨hal-01474275⟩
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