Relative importance of different climate policy elements for corporate climate innovation activities: findings for the power sector

This study investigates the relative importance of different climate policy elements for power sector companies’ investment decisions regarding “building of new plants” (adoption) and “research, development and demonstration” (RD&D). The climate policy elements examined are the EU Emission Trading System (EU ETS), as Europe’s core climate policy instrument, on the one hand, and long-term climate policy targets for 2020, on the other hand. These elements are compared to the relevance of other factors in the business environment, including other policies relevant for such investment decisions. Throughout the study the firms are differentiated along their value chain position, i.e. power generators (with at least one of their plants subject to the EU ETS) and technology providers (equipment manufacturers). The study pays particular attention to differences in firms’ technology portfolios and CO2 price expectations. The analysis is based on data from a survey conducted among European firms in November and December 2009.