Carbon Pricing for Low Carbon Investment

Completed Project

Department

Climate Policy

Project Management

Karsten Neuhoff

Project Period

January 1, 2010 - December 31, 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)

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.

DIW Team