Economic competitiveness
The Institute researches the economic impact of climate change and energy policies on businesses whose competitors are located in countries with less stringent environmental regulation.
Analysis by the Institute shows that UK climate change policies have so far had no adverse impacts on the competitiveness of UK industries. However, the possibility of competitiveness impacts in the future as a result of higher carbon prices cannot be ruled out. It is necessary to carefully identify which sectors are genuinely at risk of carbon leakage and target mitigating policy instruments at those sectors in line with the objective of achieving global emissions reductions.
Key publications:
UK climate change policy: how does it affect competitiveness?
Presentation given at the UK All-Party Parliamentary Climate Change Group in London on 10 May 2016. read more »
UK climate change policy: how does it affect competitiveness?
The Committee on Climate Change has recommended that setting a target to reduce UK emissions of greenhouse gases to an average of 57 per cent below their 1990 … read more »
The competitiveness impact of a UK carbon price: what do the data say?
This paper explores the potential impact of a uniform £20 per tonne carbon price on fuels and production costs across all 106 industries that comprise the UK economy. read more »
Asymmetric industrial energy prices and international trade
This paper measures the response of bilateral trade flows to differences in industrial energy prices across countries. Using a panel for the period 1996-2011 including 42 countries, 62 sectors and … read more »
The impacts of environmental regulations on competitiveness
Report shows that environmental regulations have only a a marginal impact on competiviveness and that the benefits often outweigh the costs read more »
Burden or opportunity? How UK emissions reductions policies affect the competitiveness of businesses
The ongoing review of the UK’s Fourth Carbon Budget is closely linked to the debate over the impact that domestic climate change policies can have on the competitiveness of businesses. … read more »
Walking alone? How the UK’s carbon targets compare with its competitors’
The UK Government is reviewing the fourth carbon budget for the period 2023-27. The Committee on Climate Change has recommended that the budget, which was originally legislated in … read more »
Climate change policies and the UK business sector: overview, impacts and suggestions for reform
The UK has a complex system of energy taxes which affect the business sector. Overlaps between taxes mean that carbon prices are uneven across sectors and fuels, and … read more »
Sectors under scrutiny – Evaluation of indicators to assess the risk of carbon leakage in the UK and Germany
One of the central debates surrounding the design of the EU Emissions Trading Scheme is the approach to addressing carbon leakage. Correctly identifying the economic activities … read more »
Options for structural measures to improve the European Union Emissions Trading System: response to a European Commission consultation
Main points The impact of ‘back-loading’, a short-term measure, will be limited. ‘Back-loading’ is unlikely to have a significant impact on the price of emissions allowances, unless the ‘back-loaded’ allowances … read more »
Who will win the green race? In search of environmental competitiveness and innovation
As the world considers greener forms of economic growth, countries and sectors are beginning to position themselves for the emerging green economy. This paper combines patent … read more »
Industry compensation under relocation risk: a firm-level analysis of the EU Emissions Trading Scheme
When industry compensation is offered to prevent relocation of regulated firms, efficiency requires that payments be distributed across firms so as to equalise marginal relocation probabilities, … read more »
The impacts of the Climate Change Levy on business: evidence from microdata
We estimate the impacts of an energy tax – the Climate Change Levy (CCL) – on the manufacturing sector using panel data from the UK production … read more »
Hot topics
Green growth
Can environmental policies deliver increased economic growth and prosperity?
Economic competitiveness
Are environmental policies a threat to economic competitiveness?
China
How will China make the shift to low-carbon growth?
Implementing the Paris Agreement
Research and analysis produced in the run up to the Paris Agreement.
Decarbonising electricity
How will the UK and Europe make the transition to a low-carbon power sector at the lowest cost?
EU ETS reform
What will successful reform look like for the world’s largest carbon market?
Green growth
Can environmental policies deliver increased economic growth and prosperity?
Economic competitiveness
Are environmental policies a threat to economic competitiveness?
China
How will China make the shift to low-carbon growth?
Implementing the Paris Agreement
Research and analysis produced in the run up to the Paris Agreement.
Decarbonising electricity
How will the UK and Europe make the transition to a low-carbon power sector at the lowest cost?
EU ETS reform
What will successful reform look like for the world’s largest carbon market?
