Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/83091
Authors: 
Brandt, Urs Steiner
Svendsen, Gert Tinggaard
Year of Publication: 
2002
Series/Report no.: 
Working Paper, Department of Environmental and Business Economics, University of Southern Denmark 35
Abstract: 
The EU Commission has recently proposed a new directive establishing a framework for greenhouse gas (GHG) emissions trading within the European Union. The idea is to devalue the emission quotas in circulation by the year 2012 at latest, so that the EU will meet its Kyoto target level of an 8% GHG reduction. Our main question is whether the final choice of allocation rule can be explained by potential industrial net winners involved in the policy making process. We answer this question by using rent-seeking theory and by analysing the Green Paper hearing replies from the main industrial groups. In other words, we want to explain and observe how rent-seeking (or lobbyism) affects the de-sign of environmental regulation and energy policy in favour of well-organized industrial interest groups. We argue that some firms are likely to reap a net gain from being regulated by a grandfathered emission trading system. This is so be-cause total costs of emission reduction and lobbyism are likely to be smaller than the total rents from having this type of regulation.
Subjects: 
Rent-seeking
lobbyism
grandfathering
greenhouse gases
Kyoto Protocol
emission trading
EU
JEL: 
Q28
H2
H4
Document Type: 
Working Paper
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