Innovation and Efficiency under the EU ETS

• Florence School of Transnational Governance
• EUI Climate Workshop
• STG Climate

Seminar as part of the EUI Climate Workshop

This project investigates the innovation and emission reduction behavior of firms regulated by the European Union Emissions Trading System (EU ETS) from 2014 to 2022, employing a two-step analytical framework grounded in a technological frontier approach. In the first step, yearly technology frontiers are constructed for narrow sectors covered by the EU ETS, using firm-level data on inputs and outputs (ORBIS and EUTL). In the second step, we compute the distance of each firm from its sector-specific technological frontier using a directional distance function approach. A regression analysis then explores the determinants of this distance, with patenting activity (PATSTAT) and firm characteristics—such as size, products, profitability, and age (ORBIS)—serving as key independent variables.

Chair:

• Simone Borghesi, Director - Climate, Florence School of Regulation, EUI

Presentation by:

• Aliénor Cameron, Researcher, Climate Economics Economics Chair, EconomiX and ADEME