EU taxonomy and the principle of proportionality : will increased costs of borrowing lead to more derogations from emission limits?

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216208%3A11240%2F21%3A10437080" target="_blank" >RIV/00216208:11240/21:10437080 - isvavai.cz</a>

Nalezeny alternativní kódy

RIV/44555601:13510/21:43896601

Výsledek na webu

<a href="https://verso.is.cuni.cz/pub/verso.fpl?fname=obd_publikace_handle&handle=XolX4PWzOJ" target="_blank" >https://verso.is.cuni.cz/pub/verso.fpl?fname=obd_publikace_handle&handle=XolX4PWzOJ</a>

DOI - Digital Object Identifier

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Jazyk výsledku

angličtina

Název v původním jazyce

EU taxonomy and the principle of proportionality : will increased costs of borrowing lead to more derogations from emission limits?

Popis výsledku v původním jazyce

The European Union has introduced a new taxonomy, which prohibits banking institutions from financing coal-related projects, even when they are aimed at emission abatement. This fact could significantly increase the costs of compliance with the latest emission limits for large combustion plants. Considering that plants may be granted a derogation from achieving the emission limits due to disproportionate costs, the new taxonomy could unintentionally contribute to a higher number of derogations in Europe. With the least expensive option of external funding being unavailable, facilities would have to rely on other options. This paper examines the sensitivity of costs of compliance to changes in several loan attributes such as the interest rate, the length of the payback period and the share of the funds that needs to be borrowed. Czech data were used to make a case study on a hypothetical power plant that needs to retrofit its current technology. The results show that in some cases even a slight change to the interest rate or other parameters may change the outcome of a proportionality assessment. With sources of external financing uncertain, the costs of borrowing could easily prove to be prohibitive, leading to disproportionate costs compared to environmental effects of the regulation.

Název v anglickém jazyce

EU taxonomy and the principle of proportionality : will increased costs of borrowing lead to more derogations from emission limits?

Popis výsledku anglicky

The European Union has introduced a new taxonomy, which prohibits banking institutions from financing coal-related projects, even when they are aimed at emission abatement. This fact could significantly increase the costs of compliance with the latest emission limits for large combustion plants. Considering that plants may be granted a derogation from achieving the emission limits due to disproportionate costs, the new taxonomy could unintentionally contribute to a higher number of derogations in Europe. With the least expensive option of external funding being unavailable, facilities would have to rely on other options. This paper examines the sensitivity of costs of compliance to changes in several loan attributes such as the interest rate, the length of the payback period and the share of the funds that needs to be borrowed. Czech data were used to make a case study on a hypothetical power plant that needs to retrofit its current technology. The results show that in some cases even a slight change to the interest rate or other parameters may change the outcome of a proportionality assessment. With sources of external financing uncertain, the costs of borrowing could easily prove to be prohibitive, leading to disproportionate costs compared to environmental effects of the regulation.

Druh

J_SC - Článek v periodiku v databázi SCOPUS

CEP obor

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OECD FORD obor

50201 - Economic Theory

Projekt

<a href="/cs/project/EF17_048%2F0007435" target="_blank" >EF17_048/0007435: Smart City - Smart Region - Smart Community</a><br>

Návaznosti

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Rok uplatnění

2021

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název periodika

Waste Forum

ISSN

1804-0195

e-ISSN

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Svazek periodika

22

Číslo periodika v rámci svazku

4

Stát vydavatele periodika

CZ - Česká republika

Počet stran výsledku

10

Strana od-do

217-226

Kód UT WoS článku

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EID výsledku v databázi Scopus

2-s2.0-85126514944