KfW/ZEW CO2 Barometer 2016 – Carbon Edition: How the EU ETS can contribute to meeting the ambitious targets of the Paris Agreement

The KfW/ZEW CO2 Barometer – developed as part of a cooperation project of KfW Bankengruppe and the Centre for European Economic Research (ZEW) – has been analysing the situation of the German companies regulated under the European Union Emissions Trading System (EU ETS) on an annual basis since 2009. The study’s objective is to closely monitor firm behaviour in carbon markets in order to provide detailed information for policy-makers, businesses, and the research community. For that purpose, all German firms regulated under the EU ETS are invited to participate in the survey every year. On average, approximately 130 companies of 800 have responded to the questionnaire per year. The results are reported in an annual publication, the KfW/ZEW CO2 Barometer – Carbon Edition. Important findings of this year's survey: - While the Paris Agreement has the potential to be a major breakthrough in global climate negotiations, a majority of German companies participating in the EU ETS do not expect that it will be effective in reducing global emissions, not even in the long run. - In the current trading period the EU ETS has generated only weak incentives for firms to implement carbon abatement measures. - The trading scheme should be further strengthened to ensure the effectiveness and efficiency of climate action in Europe.

Osberghaus, Daniel, Peter Heindl, Katrin Sommerfeld and Holger Höfling (2016), KfW/ZEW CO2 Barometer 2016 – Carbon Edition: How the EU ETS can contribute to meeting the ambitious targets of the Paris Agreement, KfW Bankengruppe, Frankfurt am Main