Silviase/jgov_v1.4_full_ann huggingface dataset:
## References

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ELLERMAN, A. D., JOSKOW, P. L., SCHMALENSEE, R., MONTERO, J. P. & BAILEY, E. M. (2005) Markets for Clean Air: the U.S. Acid Rain Program, New York, Cambridge University Press.
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JOSKOW, P. L., SCHMALENSEE, R. & BAILEY, E. M. (1998) The Market for Sulfur Dioxide Emissions. The American Economic Review, 88, 669-685.

KERR, S. & MARÉ, D. C. (1998) Transaction Costs and Tradable Permit Markets: The United States Lead Phasedown Motu Economic and Public Policy Research draft manuscript. Wellington, Motu Economic and Public Policy Research

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SCHLEICH, J. & BETZ, R. (2004) EU emissions trading and transaction costs for small and medium sized companies. Intereconomics, 39, 121-123.

SOLOMON, B. D. (1999) New Directions in Emissions Trading: the Potential Contribution of New Institutional Economics. Ecological Economics, 30, 371-387.

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Unless otherwise stated please answer each question by marking X in the appropriate box(es).

Details of the person who led the completion of the questionnaire: PLEASE COMPELTE ACROSS
Name
Position
Telephone number
Fax number
E-mail address

Firm name
Number of employees
In which geographic markets did your firm sell goods or services during 2005-2007? TICK ALL THAT APPLY.	Local/regional
National
Other European Union countries
All other countries
Is your firm a part of a group with multiple installations involved in the EU ETS?	Yes
No
Transaction costs are the costs your firm incurred in preparing for, setting up systems to implement EU ETS, and then participating in the market during 2005-2007. Transaction costs can be grouped into three categories:
1) early implementation costs;
2) monitoring, reporting, and verification (MRV) costs; and,
3) trading costs.
The first two categories of costs were relevant for all installations in the EU ETS. The third category of costs was significant only for installations that participated in the market and traded European Union CO2 emissions allowances (EUA) during the first phase of the EU ETS. It should be noted that the costs of the EUA themselves are not included in any of the above categories.
'EUA' is the European Union CO2 emissions allowance.
An allowance, according to the Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003, '…means an allowance to emit one Tonne of Carbon Dioxide Equivalent during a specified period, which shall be valid only for the purposes of meeting the requirements of this Directive and shall be transferable in accordance with the provisions of this Directive.'
Installation, according to the Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003, '…means a stationary technical unit where one or more activities listed in Annex I are carried out and any other directly associated activities which have a technical connection with the activities carried out on that site and which could have an effect on emissions and pollution.'
SECTION A Early implementation costs
The early implementation costs are the costs incurred by firms in the EU ETS before the official start of the scheme. These costs should have been incurred prior to January 1, 2005 but some firms may have realized these costs during the early stages of the first phase for a variety of reasons. Please consider your early implementation costs according to their nature, instead of timing.
During this time, familiarisation with scheme rules and guidelines was achieved, baseline emissions were calculated, monitoring equipment was installed, and an operator holding account for each installation was established. All these costs can be considered as one-time fixed set-up costs and divided into four categories:
- internal costs incurred by your firm in terms of additional management and staff time and training;
- external costs incurred in terms of consultancy services taken on;
- capital costs, meaning emissions measurement, monitoring, recording, and data storage equipment needed to comply;
- other costs not included in the above.

A1 Did your firm incur any internal costs for the early implementation procedures of the EU ETS?

Yes	CONTINUE
No	GO TO A4

A2 Who performed the early implementation procedures of the EU ETS in your firm?

Number of people	Percentage of time spent
Existing internal staff	%
Newly hired staff	%
A3 What is the estimate of overall full-time working days spent by your firm’s staff on the early implementation procedures of the EU ETS? PLEASE WRITE IN NUMBER – RECORD NONE AS ‘00’.

A4 Did your firm incur any external costs for the early implementation procedures of the EU ETS?

Yes	CONTINUE
No	GO TO A6

A5 Please provide your firm’s estimated overall external costs on the early implementation procedures of the EU ETS in 000s of Euro.

A6 Did your firm incur any capital costs necessary to perform monitoring and reporting activities?

Yes	CONTINUE
No	GO TO A9
A7 What necessary equipment or technology did your firm purchase to perform monitoring and reporting activities? Please describe.

A8 Please provide the estimated overall acquisition costs of equipment or technology necessary to perform monitoring and reporting activities in 000s of Euro.

A9 What part of the early implementation procedure was the most costly for your firm? Please rank the following procedures with 1 being least costly and 4 most costly.

Measurement of baseline emissions
Bringing Monitoring and Reporting plan to the required standard
Learning about the functioning of the EU ETS
Application procedures for allowances (other than measurement of baseline emissions)
Other (please specify)
SECTION B Monitoring, reporting and verification (MRV) costs

MRV costs were incurred by all installations in the EU ETS. We assume that these costs are a combination of internal firm costs, mainly management and staff time, and external consultancy services, where your firm buys the necessary capacity to be MRV compliant. Please, note that the MRV costs do not include fixed capital costs. The fixed costs related to the MRV procedures are accounted for as early implementation costs for the purposes of this survey.

B1 Did your firm incur any internal costs for the MRV procedures of the EU ETS?

Yes	CONTINUE
No	GO TO B4

B2 Who performed the MRV procedures of the EU ETS in your firm?

Number of people	Percentage of time spent
Existing internal staff	%
Newly hired staff	%
B3 What is the estimate of the overall full-time working days spent (an annual average during 2005-2007) by your firm’s staff on the MRV procedures of the EU ETS? PLEASE WRITE IN NUMBER – RECORD NONE AS ‘00’.

B4 Did your firm incur any external costs for the MRV procedures of the EU ETS?

Yes	CONTINUE
No	GO TO B6

B5 Please provide your firm’s estimated overall external costs (an annual average during 2005-2007) on the MRV procedures in 000s of Euro.

B6 Please provide a breakdown of your firm’s total MRV costs.

Monitoring	%
Reporting	%
Verification	%
Total MRV	100%

B7 How frequently did you monitor your firm’s $ CO_{2} $ emissions?

Daily
Weekly
Monthly
Quarterly
Semi-annually
Annually
Ad hoc (please specify)
Trading costs are incurred by firms covered by the EU ETS which traded EUAs during 2005-2007. Trading costs are those related to the search of trading partner, price bargaining, enforcement of trade contract, and other legalities. The costs of the EUA themselves are not included.
All questions refer to the decisions or actions taken during 2005-2007.

C1 Did your firm trade any EUAs?

Yes	GO TO C3
No	GO TO C2 ONLY

C2 What were the main reasons for not trading? TICK ALL THAT APPLY.

Met the $ \mathrm{CO}_{2} $ obligation without buying EUA
Met the $ \mathrm{CO}_{2} $ obligation without selling EUA
$ \mathrm{CO}_{2} $ abatement was cheaper than buying EUA
Other (please specify)
C3 How many EUAs did your firm buy/sell? PLEASE WRITE IN NUMBER – RECORD NONE AS '00'.

Bought
Sold

C4 Who did your firm trade with? TICK ALL THAT APPLY.

Domestic installations inside your business group
Foreign installations inside your business group
Domestic installations outside your business group
Foreign installations outside your business group
With financial institutions (e.g. brokers, exchanges) (please specify)

C5 How did your firm trade?

Directly, without a third party	CONTINUE
Indirectly, via a third party	GO TO C10

C6 What were the main reasons for trading directly? TICK ALL THAT APPLY.
It was cheaper than trading via a third party
Wanted to learn how to trade
Trade volume was too small to trade via a third party
Other (please specify)

C7 How often did your firm trade?

Daily
Weekly
Monthly
Quarterly
Semi-annually
Annually
Ad hoc ( please specify)

C8 Did your firm trade with the same partner more than once?

Yes
No

C9 How long did a buy/sell transaction take to complete?

Buy transaction	Sell transaction
Less than one week
One week or more, but less than one month
Other (please specify)
C10 What were the main reasons for trading via a third party? TICK ALL THAT APPLY.

It was cheaper than trading directly
It was quicker than trading directly
There was no in-house capacity to trade directly
Other (please specify)

C11 What intermediary services did your firm use to facilitate the trade of EUAs? TICK ALL THAT APPLY.

Financial institution (such as banks)
Specialised carbon trading brokerages
Exchange
Other (please specify)

D1 What aspect of EU ETS compliance was the most costly for your firm? Please rank the following activities with 1 being least costly and 5 most costly.

Early implementation
Monitoring
Reporting
Verification
Trading
D2 How did your firm’s total transaction costs (except early implementation costs) evolve over 2005-2007?

They increased
They decreased
They remained the same

D3 Please provide below any additional comments which are important to understand the transaction costs experienced by your firm.
## Annex 2 Ireland’s Allocation (2005-2007)

Recipient	Allowances	Share of total allocation, %
Installations permitted before 31/03/2004	65 006 999	97.1
allocation to existing installations	57 714 569	86.2
allocation to known planned developments	7 292 430	10.9
New entrant Set Aside	1 004 400	1.5
Auction	502 201	0.8
Combined heat and power Set Aside	446 400	0.7
TOTAL	66 960 000	100

Source: EPA and author’s calculations.
Annex 3 Summary of companies contacted

Contacted companies	Contacted companies (closed companies excluded)	Respondents (% of contacted companies, closed plants excluded)
Number of companies	72	68	27 39.7
Number of installations	106	101	40 39.6
Initial allocation 2005-2007 $ ^{36} $	57714569	56788736	39713822 69.9
Verified CO $ _{2} $ emissions 2005-2007 $ ^{37} $	64777597	64514997	45023963 69.8

Source: CITL and author’s calculations
## Annex 4 Interview Profiles

I	II	III	IV	V	IV
Position	Environmental manager	Strategy division	Environmental chemist	Environmental engineer	Environmental manager	Financial controller
No. of employees	~800	~2000	~400	~450	~50	~50
Sector	Private	Private	Private	Private	Private	Private
Multi installations	Yes	Yes	No	No	No	No
Single installations	No	No	Yes	Yes	Yes	Yes
Market	Local/Foreign	Local	Local/Foreign	Local/Foreign	Local	Local

Source: Survey.
Total	Per tonne of $ CO_{2} $ verified
Early implementation	1. Answers to the questions used:
-A3, internal costs in fulltime working days;
-A5, external costs in 000s of EUR;
-A8, capital costs in 000s of EUR.
2. Internal costs from total full-time days converted in 000s of EUR assuming:
-8 hours of full-time working day;
-average hourly labour (wages and salaries) rate of €37.89 $ ^{38} $ .
3. Total costs
-Internal costs, external costs and capital costs expressed in 000s of EUR are added together	1. Total early implementation costs converted from 000s of EUR to EUR.
2. Total early implementation costs in EUR are divided by total verified emissions for 2005-2007 period emitted by the respondents permitted before 31/03/2004, i.e. new planned developments are included.
MRV costs	1. Answers to the questions used:
-B3, internal costs in fulltime working days, annual average during 2005-2007;
-B5, external costs in 000s of EUR, annual average during 2005-2007;
2. Internal costs from total full-time days converted in 000s of EUR assuming:
-8 hours of full-time working day;
-average hourly labour (wages and salaries) rate of €37.89 (see footnote 38)
3. Total costs:
-Internal costs and external costs expressed in 000s of EUR are multiplied by three and added together.	1. Total MRV costs converted from 000s of EUR to EUR.
2. Total MRV costs in EUR are divided by total verified emissions for 2005-2007 period emitted by the respondents permitted before 31/03/2004, i.e. new planned developments are included.
## Annex 6 Early implementation cost

No. of respondents	Verified CO2 emissions, 2005-2007	Internal costs	Consultancy costs	Capital costs	Total costs
Total, EUR thousands
All	25	41903637	655.6	188.0	953.0	1796.59
Large	4	40734240	360.7	120.0	880.0	1360.65
Medium	7	822845	162.2	48.0	48.0	258.17
Small	14	346552	132.8	20.0	25.0	177.77
Per respondent, EUR thousands
All	25	41903637	26.2	7.5	38.1	71.86
Large	4	40734240	90.2	30.0	220.0	340.16
Medium	7	822845	23.2	6.9	6.9	36.88
Small	14	346552	9.5	1.4	1.8	12.70
Per tonne of CO2 emissions verified, EUR
All	25	41903637	0.02	0.00	0.02	0.04
Large	4	40734240	0.01	0.00	0.02	0.03
Medium	7	822845	0.20	0.06	0.06	0.31
Small	14	346552	0.38	0.06	0.07	0.51

Source: Survey.
No. of respondents	Verified CO2 emissions, 2005-2007	3-year internal costs	3-year consultancy costs	3-year total costs
Total, EUR thousands
All	27	45023963	1207.6	795.2	2002.78
Large	5	43835768	508.3	483.0	991.33
Medium	7	822845	296.5	165.0	461.45
Small	15	365350	402.8	147.2	550.00
Per respondent, EUR thousands
All	27	45023963	44.7	29.5	74.18
Large	5	43835768	101.7	96.6	198.27
Medium	7	822845	42.4	23.6	65.92
Small	15	365350	26.9	9.8	36.67
Per tonne of CO2 emissions verified, EUR
All	27	45023963	0.03	0.02	0.04
Large	5	43835768	0.01	0.01	0.02
Medium	7	822845	0.36	0.20	0.56
Small	15	365350	1.10	0.40	1.51

Source: Survey.
## Annex 8 Total transaction costs

Early implementation costs	3-year MRV costs	3-year total transaction costs
Total, EUR thousands
All	1796.59	2002.78	3799.37
Large	1360.65	991.33	2351.99
Medium	258.17	461.45	719.62
Small	177.77	550.00	727.76
Per respondent, EUR thousands
All	71.86	74.18	146.04
Large	340.16	198.27	538.43
Medium	36.88	65.92	102.80
Small	12.70	36.67	49.37
Per tonne of CO2 emissions verified, EUR
All	0.04	0.04	0.08
Large	0.03	0.02	0.05
Medium	0.31	0.56	0.87
Small	0.51	1.51	2.02

Source: Survey.
# RESPONSE BY INDUSTRY TO THE EU ETS – IRELAND CASE STUDY

## I ntroduction

Environmental policy and technological innovation are intertwined through the interaction of market failures (Jaffe et al., 2005). The effects on technological changes inspired by environmental policy are arguably one of the most important metrics by which policy tools' effectiveness should be judged. Kneese and Schultz (1978) assert that over the long haul, perhaps the single most important criterion on which to judge environmental policies is the extent to which they spur new technology towards the efficient conservation of environmental quality.

The link between the EU ETS and the market failures leading to sub-optimal levels of climate change related technology is well documented and explicit. Conversations associated with the EU ETS design features often boil down to their effects on the price level of EUAs and what kind of price is required for alternative climate-friendly technologies to get traction in the European marketplace. While in terms of technology cycles, the pilot phase of the EU ETS is rather short and recent. However, the announcement was made in 2003 of the introduction of $ CO_{2} $ emissions trading and prospective ETS firms and industries likely knew the policy was inevitable for them. Therefore, in terms of the process of technological change, it is reasonable to think of 2003 or slightly before, as the official announcement was not likely a surprise to anyone, as the beginning of any changes in technology or innovation activities.

We use Ireland as a case study in directly questioning operators initially by mail survey in the EU ETS how the price of $ CO_{2} $ emissions affected their actions regarding the various components of the cycle of technological change. Follow up face-to-face interviews were performed in order to expand understanding of interesting points, and further delve into the decisions making process of both proven and potential environmental innovators. Thirty firms, accounting for 70% of allocated allowances, responded.

## I reland and the EU ETS

The Irish economy is not a representative sample of the aggregate European Union economy, with ambitious “Celtic Tiger” GDP growth rates, substantial foreign direct investment and low unemployment rates. However, the Irish emissions trading sector is not such a mismatch when comparing its European Union emissions allowance (EUA) characteristics to that of the EU aggregate. The Irish emissions trading sector is roughly proportionate to the EU where the majority of EUAs went to the power generation sector, approximately 20% was allocated to internationally competitive sectors considered to be at risk of carbon leakage, iron/stele and cement for EU while Ireland has only a cement industry. In order to protect the confidentiality of individual responses, we were not able to categorise the responses by size or sector.
Table 1. Allocated EUAs by Economic Activity

Sector	EU 27	Ireland
Combustion installations	69.89%	77.03%
Mineral oil refineries	7.62%	2.07%
Coke ovens	1.08%	0.00%
Metal ore roasting or sintering installations	0.60%	0.00%
Production of pig iron or steel	8.06%	0.00%
Production of cement clinker or lime	9.02%	20.47%
Manufacture of glass including glass fibre	1.06%	0.16%
Manufacture of ceramic products by firing	0.87%	0.17%
Production of pulp, paper and board	1.77%	0.09%
Other activity opted-in	0.02%	0.00%
All installations	100%	100%

Source: CITL and own calculations

The main difference between Ireland and the total trading system that might affect the ability to generalize results from this survey to the wider trading community is the fact that Ireland was net short, meaning installations were not given enough EUA to cover their eventual emissions, by approximately 13% while the entire trading community (including Ireland) was net long by 2.4% $ ^{39} $ . Irish firms might have experienced an added incentive to reduce emissions due to the fact that they were not allocated enough EUAs to cover their emissions. However, the price for EUAs was constant across Europe and the financial incentive to decrease emissions was uniform across all firms participating in the program.

Table 2. Recipient Allowances

Installations permitted before 31/03/2004	65,006,999	97.08%
New Entrant Set Aside	1,004,400	1.50%
CHP Set Aside	446,400	0.67%
Auction	502,201	0.75%
Total	66,960,000	100.00%

Source: EPA and own calculations

Irish allocation methodology contained a few features that may differentiate it from other European allocation plans. Allowances were set aside specifically for combined heat and power (CHP) activities and Ireland committed to auctioning more allowances than most member states, as a percentage of totals. However, given the magnitude ( $ <2\% $ of total) of