Epsilon Archive for Student Projects

Abstract

Whether the emissions trading scheme (ETS) can achieve energy conservation reduction in
European countries is crucial for these countries to achieve sustainable economic and environmental
development. This study investigates the oil and petroleum products conservation effects of the
European Union’s permit trading policy implemented in 2005. Using country-level panel data of
different sectors from 1995 to 2019, we apply the difference-in-difference-in-difference (DDD)
model to examine the effects on oil consumption. In addition, we investigate the drivers of oil
consumption in the agricultural sector, as oil is the dominant energy source in global and European
agriculture. Based on the results, we derive recommendations for policy makers on how to limit the
consumption of oil as a fossil fuel, particularly in agricultural markets.