In Jon Birger Skjærseth and Per Ove Eikeland (eds), Corporate Responses to EU Emissions Trading: Resistance, Innovation or Responsibility? Farnham (UK), Ashgate, 2013, pp. 99-125.
The oil industry, which makes a living from some of the key sources of anthropogenic climate change, stands out as an important sector for achieving a low-carbon economy in Europe and other parts of the world. To what extent, how and under what conditions has the ETS affected the climate strategies of major multinational oil companies? This chapter shows that the main importance of the ETS in this sector concerns the long-term strategic consequences of carbon pricing. First of all, oil companies base their long-term strategies on forecasts or scenarios. The ETS has affected these forecasts by changing company beliefs about a future in which concerted governmental action, a price on carbon emissions and the need for more low-carbon energy will occupy a more prominent place. Second, the impact of the ETS has been most significant for those companies that have lagged furthest behind the ‘leaders’. Finally, we see that the EU is developing a technology supply side to its climate policy in the form of technology platforms to stimulate innovation on low-carbon solutions. These initiatives are linked to the ETS in several ways. The success of these initiatives will be important for future GHG emissions from the oil industry, and in particular efforts to make carbon capture and storage (CCS) commercially viable.