Emissions Trading and Innovation

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Focusing on the German electricity sector, this book evaluates the effectiveness of emissions trading in fostering climate change innovation. It employs both theoretical and empirical methods, utilizing an algebraic model to compare profits under different design options and conducting surveys before and after the trading scheme's implementation. The findings suggest that while the emissions trading system has made some progress in encouraging innovation, it has not yet reached its full potential for transforming the electricity industry towards greater sustainability.