Climate Change Policy and Business in Europe. Evidence from Interviewing Managers

This report presents new evidence relating to the effects of climate policy in Europe, particularly the European Union Emissions Trading Scheme (EU ETS). The evidence is based on new data from almost 800 phone interviews we conducted with managers in manufacturing plants in six European countries: Belgium, France, Germany, Hungary, Poland and the UK. The interview design follows an innovative method that has recently emerged in the study of management practices and that mitigates well-known biases found in more conventional survey designs such as paper-based or web-based questionnaires. This report describes the interview design in detail and summarises the responses. For further analysis, we link the interview data with company data from a range of secondary sources including transaction data from the official EU ETS registry and performance data from both commercial and government sources. We use the combined data to analyse three aspects of the EU ETS in depth, namely (i) the behaviour of firms in the EU ETS, (ii) the vulnerability of firms in terms of negative impacts on employment and carbon leakage, along with an assessment of how well the proposed EU legislation to protect vulnerable firms does at identifying them, and (iii) alternative criteria for the allocation of free emission permits during the next phase of the EU ETS.