17 Jan 2008 05:01:29
New emissions trading scheme will not affect business competitiveness
A new study has claimed that the European Union's emissions trading scheme will not have a damaging effect on the competitiveness of both UK and European businesses.
Research published by the Carbon Trust indicated that continued emissions reductions imposed by the EU would not, in overall terms, adversely affect firms' ability to compete with rivals outside the region.
Despite this, the study did highlight six sub-sectors that could have their competitiveness affected by stricter emissions controls, including the cement, steel and aluminium industries.
Michael Grubb, chief economist at the Carbon Trust, said: "This analysis is a nail in the coffin for the myth that the EU ETS presents a threat to overall business competitiveness.
"However, it has found that a small group of sub-sectors face costs which could lead to a modest degree of carbon leakage."
As a result, the report recommended that those specific sectors be given free emissions allocations for a brief period to allow them to maintain their competitiveness against overseas rivals.