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Emissions trading schemes (ETS) have spread across the globe to tackle climate change. However, limited attention has been given to how ETS characteristics and designs differ and why. We use the concept of institutional complementarity to explore how the EU ETS and South Korea's ETS (K‐ETS) adapt to complement established political economy. The EU ETS is characterized as a market with stakeholder ownership, while the K‐ETS is more regulatory in nature with government leadership. The EU ETS complements a decentralized political system with liberalized energy market, and the K‐ETS became compatible with the centralized majoritarian politics and a regulated electricity market. The ETSs have evolved incrementally, and they are not likely to link in the foreseeable future due to divergence. We suggest a strong focus on "how to adapt" an ETS to its own institution rather than adopting the established blueprint model in countries with a strong regulatory style of governance. Related Articles: Caliskan, Cantay. 2020. "The Influence of Elite Networks on Green Policy Making." Politics & Policy 48(6): 1104–37. https://doi.org/10.1111/polp.12382. Tanaka, Yugo, Andrew Chapman, Tetsuo Tezuka, and Shigeki Sakurai. 2020. "Multiple Streams and Power Sector Policy Change: Evidence from the Feed‐In Tariff Policy Process in Japan." Politics & Policy 48(3): 464–89. https://doi.org/10.1111/polp.12357. von Malmborg, Fredrik. 2023. "Combining the Advocacy Coalition Framework and Argumentative Discourse Analysis: The Case of the 'Energy Efficiency First' Principle in EU Energy and Climate Policy." Politics & Policy 51(2): 222–41. https://doi.org/10.1111/polp.12525. [ABSTRACT FROM AUTHOR]

This study investigates the relationship between emissions trading schemes and Research and Development (R&D) productivity based on data from manufacturing industries participating in the Korean Emissions Trading Scheme (KETS). First, this study estimates the total factor R&D productivity by industry, and it is confirmed that changes in R&D productivity vary across industries. The total factor R&D productivity in Korea has been decreasing, but the annual growth trend has been increasing rapidly due to the introduction of the KETS. Based on the estimated R&D productivity, panel data model estimation is executed to reveal the effect of environmental policy on R&D productivity. Empirical results confirm that environmental policy plays a vital role in promoting R&D productivity, and policy stringency affects R&D performance. The results also find that the environmental policy encourages enterprises to participate in KETS for improving R&D productivity. [ABSTRACT FROM AUTHOR]

With increasing global pressure on transition to carbon neutrality, various technical and policy efforts such as emission trading scheme and carbon tax are being made to improve energy productivity. Yet, there are not many literatures that analyze determinants of firm-level energy productivity, which is an important issue as energy use in industry accounts for one fourth of global carbon emission. This study investigates factors affecting energy productivity such as technology innovation, environmental policy and energy price based on firm-level data from the Korean Emission Trading Scheme (KETS). The total factor energy productivity is estimated by industry based on stochastic frontier analysis (SFA) and panel data analysis is performed to identify determinants of firm-level energy productivity. The results show that energy productivity in Korea has been improved since 2016, and technical progress and environmental policy play an important role in promoting energy productivity. In addition, analysis identifying industry-specific characteristics is performed as their production process and energy consumptions structures vary. The result shows that innovation activity does not significantly affect energy productivity in process industries, but it does in the assembling and high technology industries. This paper implies that policy design reflecting industry-specific characteristics is important to improve energy efficiency more effectively. [ABSTRACT FROM AUTHOR]