Economic competitiveness

Electronic stok data board.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:

A large body of academic studies suggest climate change policies have had only a very small impact on competitiveness

a commentary by Antoine Dechezleprêtre, Misato Sato  7 June, 2017

President Trump claimed that the Paris Agreement on climate change “disadvantages the United States to the exclusive benefit of other countries”. This commentary highlights a number of recent research papers which show no evidence for such claims. read more »


UK climate change policy: how does it affect competitiveness?

UK climate change policy: how does it affect competitiveness?

a policy presentation by Samuela Bassi  10 May, 2016

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?

a policy report by Samuela Bassi, Chris Duffy  10 May, 2016

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?

a policy paper by David Grover, Ganga Shreedhar, Dimitri Zenghelis  11 January, 2016

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

Asymmetric industrial energy prices and international trade

a working paper by Misato Sato, Antoine Dechezleprêtre  2 March, 2015

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

a policy report by Antoine Dechezleprêtre, Misato Sato  14 November, 2014

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

a policy paper by Dimitri Zenghelis, Samuela Bassi  6 July, 2014

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’

a policy paper by Samuela Bassi, Samuel Fankhauser, Fergus Green, Michal Nachmany  18 March, 2014

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

a policy paper by Samuela Bassi, Antoine Dechezleprêtre, Samuel Fankhauser  1 November, 2013

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

Sectors under scrutiny – Evaluation of indicators to assess the risk of carbon leakage in the UK and Germany

a working paper by Misato Sato  1 May, 2013

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

Options for structural measures to improve the European Union Emissions Trading System: response to a European Commission consultation

a policy paper by Luca Taschini  1 March, 2013

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

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

Industry compensation under relocation risk: a firm-level analysis of the EU Emissions Trading Scheme

a working paper by Ralf Martin  1 July, 2012

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

The impacts of the Climate Change Levy on business: evidence from microdata

a working paper by Ralf Martin  1 August, 2009

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 »