EUROPEAN UNION EMISSIONS TRADING SYSTEM’S IMPACT ON LATVIA’S COMPETITIVENESS

Abstract

The goal of this paper is to analyse the general impact of the European Union Emissions Trading System (EU ETS) on Latvia’s competitiveness. The hypothesis of this paper – the EU ETS in past did not had a significant impact on Latvia’s competitiveness. At the beginning of the paper the EU ETS mechanism is discussed in the context of M.E. Porter’s identified principal factors determining state’s competitiveness. Afterwards the EU ETS operation in Latvia is described and its impact on Latvia’s competitiveness is analysed. The analysis is based on statistical data about Latvia’s 79 companies and their operation in 2005-2010, inter alia, allocations and transactions of European Union Allowances (EUAs), changes of their fixed assets’ values and used energy resources, as well as the results of the survey of Latvia’s companies participating in the EU ETS.

DOI: http://dx.doi.org/10.5755/j01.em.17.3.2113