The impact of the EU ETS on firms' investment decisions: evidence from a survey

One of the stated aims of the EU ETS is to promote investment in clean, low-carbon technologies. Against this background, this paper aims to provide an original analysis of how the EU ETS has impacted on corporate investment decisions and whether it does so at a level adequate to reach the long-term political targets required for a decarbonization of the European economy. In this paper, the authors provide empirical evidence for this question by analyzing corporate reactions to the EU ETS for Belgian EU ETS sites. Despite the fact that most managers use prices that are much higher than spot prices in their appraisal reports, expected prices are still far too low to mobilize additional financing for new investments in lower carbon modes of production.