EU Emissions Trading: Policy-Induced Innovation, or Business as Usual?

Abstract

This thesis examines the innovation impact of the European Union´s Emissions Trading Scheme among emissions intensive companies in the Republic of Croatia. To this end the effects of the instrument on research, development and demonstration, adoption, and organizational change are examined. The study accounts for the impacts of various context factors, including firm-external and firm-internal variables. The empirical analysis employs a multiple case study approach. While findings support the assertion that policy-induced innovation effects arise from the pricing of carbon, the innovation fostering capacity of the instrument remains limited due to continued low levels of policy stringency and predictability.