Carbon Pricing for Low Carbon Investment

Department(s)/ Research Infrastructure
Climate Policy
Project Status
Completed Project
Project Duration
since/from 2010 to 2011
Commissioned by
Climate Policy Initiative and Climate Strategies
In Cooperation with
The London School of Economics, ETH-Zürich, ISI-Fraunhofer, Universidad Carlos III de Madrid, Friedrich-Alexander-Universität Erlangen-Nürnberg (FAU)
Project Manager
Karsten Neuhoff
Project Team/Contacts at DIW Berlin

Project description

The project reviewed the impact of EU ETS on investment decisions based on two large-scale surveys among stakeholder, quantitative analysis of EUETS, assessments of legal and accounting practices, quantitative analysis of the EU ETS framework and several stakeholder workshops. The project shows that to drive low-carbon investment, policy frameworks must capture companies' attention, provide clarity for business decisions, and provide an enabling environment. The analysis suggests that improvements such as increasing stringency, limiting CDM use, changes in international financial reporting standards, and complementary policies are needed.