Dirty industries’ competitiveness in EU’s new members
| Published date | 11 July 2016 |
| Pages | 224-233 |
| DOI | https://doi.org/10.1108/WJSTSD-02-2016-0016 |
| Date | 11 July 2016 |
| Author | Hasan Agan Karaduman,Feride Gonel |
| Subject Matter | Public policy & environmental management,Environmental technology & innovation |
Dirty industries’competitiveness
in EU’s new members
Hasan Agan Karaduman and Feride Gonel
Department of Economics, Yildiz Technical University, Istanbul, Turkey
Abstract
Purpose –Despite the success in achieving the objectives for the use of renewable energy sources,
the EU’s competitiveness is not at the desired level. In particular, the largest decreases in fossil-type
energy intensity were observed in last 13 members of EU, namely, Bulgaria, Croatia, Cyprus, Czech
Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia and Slovenia. The
purpose of this paper is to trace how these countries protect the competitiveness of their dirty (energy-
intensive) industries.
Design/methodology/approach –The study employs revealed comparative advantage (RCA)
indices to measure the comparative advantage (CA) of EU-13 in dirty industries for the period
1995-2014 and assesses these indices in the framework of EU’s climate policy.
Findings –Some policies which make industries to adapt EU’s 20-20-20 targets are forcing industries.
In order to compete, these industries are leaving Europe and looking elsewhere. In this study the
authors found that, particularly chemicals and non-metallic mineral manufactures resulted in a
weakening of their CA over the years in some of these members. Similarly it is found that the RCA
indices of iron and steel and non-ferrous metals are decreasing.
Originality/value –The study addresses the EU-13’s position in terms of their competitiveness and
find the connection with the EU’s climate policy through their RCAs of dirty industries.
Keywords European Union, Revealed comparative advantage, Climate policy, Energy policy,
Energy-intensive industries
Paper type Research paper
Introduction
Global warming has been an important issue for a long time. It is clear that unlimited
burning of fossil fuels is the cause of this agenda. Therefore, in an attempt to address
this phenomenon many countries try to reduce the consumption of fossil fuels. In other
words, polluted industries that use fossil fuels are under the spotlight. Despite the
above common belief, there is still no consensus about the relationship between policy
implications on most energy-intensive industries (i.e. dirty industries) and their
comparative advantage (CA). In the literature some empirical studies find strong
evidence on positive relationship between polluted and energy-intensive industries and
their competitiveness while some studies do not find any significant relationship.
For example, James Tobey (1990) did not find any statistically significant relation
between net exports of each country’s dirty industries and the level of stringency of a
country’s environmental policies. After a decade, according to European Commission
(2014) staff working paper called as “Helping Firms Grow,”energy intensity is
negatively but insignificantly related to exports. On the other hand, Low and Yeats
(1992) tested the relationship between pollution-intensive products and revealed
comparative advantage (RCA) for 109 countries during the period of 1965-1988. They
found an increase in RCA of dirty industries in developing countries (in Eastern
Europe, Latin America and West Asia) as the pollution haven hypothesis argues. Lucas
et al. (1992) have found that the poorest but closed developing countries such as
Benin, Chad, Eritrea, Ethiopia, Gambia, Malawi, Uganda and Sudan have the highest
World Journal of Science,
Technology and Sustainable
Development
Vol. 13 No. 3, 2016
pp. 224-233
©Emerald Group Publishing Limited
2042-5945
DOI 10.1108/WJSTSD-02-2016-0016
The current issue and full text archive of this journal is available on Emerald Insight at:
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