ABSTRACT
The EU ETS was the first international policy instrument to introduce regulation of CO2 emissions of pulp and paper companies with installations in Europe. Out of 11,500 installations introduced to the system about 900 were pulp and paper mills. In terms of allocated emission allowances (EUAs) the pulp and paper industry (hereafter PPI) represents two per cent of the EU ETS (Hyvärinen 2005: 40). The ability of the ETS to induce companies to adopt more proactive and innovative abatement strategies represents a critical test of the EU’s ability to realize a lowcarbon economy. This chapter examines to what extent and how the ETS has influenced the climate strategies of major pulp and paper companies. Thus far, there have hardly been any in-depth studies of the impact of the ETS on the PPI. One notable exception is a study by Rogge et al. (2011). Based upon an examination of survey data of paper producers and technology providers in Germany, this study found that innovation activities in the PPI are mainly governed by market factors and are hardly affected by the ETS and other climate policies. However, given that the ETS is the first regulation directly targeting the CO2 emissions from pulp and paper companies in Europe, we were puzzled by the finding that the ETS had apparently so little effect on innovation activities. We suspect that an examination of survey data may miss critical aspects of corporate responses to the ETS.
