meaningful measure, as it incorporates these losses of producer and consumer surplus from the changes in both the volume and consumption of production. However, only a small number of modelling studies assessing the ex-ante cost estimates of climate change policies use welfare measures as a cost concept.

### 3. Ex-post costs in the EU ETS

The EU ETS successfully finished its pilot phase at the end of 2007. Because of the timing this study is conducted, the ex-post literature is not exhaustive compared to ex-ante one $ ^{9} $ . The existing empirical evidence on the economic consequences of the EU ETS might be organised as follows: literature discussing the price of EUA determinants, literature focussing on micro-level indicators and literature taking a broader, macroeconomic, perspective.

The EUA equilibrium price, so called marginal $ CO_{2} $ abatement costs, is readily provided by the market. The volatility of the EUA price reflected both fundamentals (fuel prices, weather conditions etc.) and policy itself over the pilot EU ETS phase (Christiansen et al., 2005, Alberola and Chevallier, 2007, Alberola et al., 2008a, Alberola et al., 2008b), as well as market sentiments and expectations. The former group of the EUA price determinants was anticipated and reflected in the EUA price during the first year of the scheme. However, the announcement of actual 2005 verified emissions leading to the EUA price crash in early 2006 clearly showed supremacy of the policy process over fundamentals.

To our best knowledge, only few studies have tried to measure the scheme’s impact on its participants on the micro level. Few articles analyse whether the EAU market had had any impact on profits of firms in the EU ETS, i.e. whether firms were able to pass through the $ CO_{2} $ opportunity costs into marginal production costs and production prices if markets are competitive. The first empirical study shows that opportunity cost pass-through rates vary between 60 percent and 100 percent for the wholesale electricity market in Germany and the Netherlands (Sijm et al., 2006). Zachmann and von Hirschhausen (2008) provide the first empirical evidence that EUA prices are passed through asymmetrically to electricity future prices in Germany, meaning that wholesale electricity prices reacted more to the EAU price increases than to decreases. Anger and Oberndorfer (2008) use firm level data and find that the EU ETS had no profound effect on firm revenues and employment in Germany. Hoffmann (2007) contributes the ex-post literature by analysing the EU ETS impacts on investment decisions of firms in German electricity sector. His study concludes that firms in the EU ETS integrate $ CO_{2} $ allowance price only in short-term and small-scale investment decision making, while an impact of the EU ETS on long-term and large-scale investments is limited. Oberndorfer (May 2008) analyses how the EAU market affects the value of electricity corporations in the EU ETS by analysing electricity stock return reactions to changes in EUA prices. His study concludes that the EUA price increases (decreases) positively (negatively) affect stock returns of the biggest electricity corporations in the EU ETS.

The macro-level ex-post literature tried to answer whether the EU ETS had had any impact on cost competitiveness at the sectoral level. As most of energy activities (e.g. electricity sector) operate on national scale and could pass through $ CO_{2} $ costs into marginal abatement costs, literature focuses on the remaining sectors - the production and processing of ferrous and non-ferrous materials.