EU ETS and competitiveness of Irish industry

Abstract

Irish electricity generators and energy-intensive industry are obliged to participate in the EU emissions trading system and this may lead to an increase in production costs for these companies. Reform of the European Union Emissions Trading System (EU ETS) has seen significant price increases and may lead to further volatility in prices for emissions allowances. There are concerns that increased costs of compliance will have a negative impact on business competitiveness in Ireland. This project aims to investigate the effects of the EU ETS on competitiveness by (i) reviewing the literature on regulation and firm competitiveness, (ii) analysing firm-level data to determine the impact of the EU ETS and green investment on the competitiveness of Irish industry thus far, (iii) using a survey to find the opinions of stakeholders regarding the EU ETS and emission reduction projects and (iv) estimating the effect on future electricity prices if Ireland were to participate in a carbon price floor.