Implementing the EU emissions trading directive in Spain: a comparative study of corporate concerns and strategies in different industrial sectors

Abstract

Although emissions trading has proved cost effective at the theoretical level, a very conflicting issue (which may lead to significant administrative costs) is the distribution of allowances between polluting sources. There are winners and losers in this process and, of course, an incentive to get as many allowances as possible. The NAPs are, therefore, a relevant source of conflict between interest groups and their final version reflects the interactions between actors with different interests, strategies and negotiation power. In this context, the Spanish NAP is no exception. By adopting a Public Choice perspective, this paper takes a closer look at the Spanish allocation process, analysing the interests and strategies of the different actors and their interactions. At the individual firm level, the Directive was considered a big threat. At the sector level, distinct sectors put forward different arguments in order to have more allowances allocated to them. Coalitions at different levels were created and lobbying already started very early in the process. The negotiations reflected the tension between the need to control emissions, the arguments put forward by firms and sectors and the minimisation of the negative impact on the overall economy.