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Carbon pricing reform and expectations Evidence from French manufacturing, 2005-2019

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  • Mélanie MARTEN

    (Université de Cergy-Pontoise, THEMA)

Abstract

This paper investigates the effects of the 2014 French carbon tax reform on plant manufacturing energy use patterns and employment outcomes using a linear panel event study specification spanning fifteen years. The analysis exploits low-carbon electricity use to construct a proxy for exposure and expected exposure to increasingly higher carbon pricing, as the rate is set to reach e100 per tCO2 by 2030. A 10 percentage point (pp) increase in exposure is significantly associated with a 1.9 pp increase in the electricity share of fuel use, along with a 4.39% decrease in total energy use. Exposure is not associated with a change in electricity use levels, but is weakly associated with a drop in fossil fuel use: the electricity to fossil fuel use ratio increases by around 4.86 percent. Exposure is also weakly associated with job losses.

Suggested Citation

  • Mélanie MARTEN, 2022. "Carbon pricing reform and expectations Evidence from French manufacturing, 2005-2019," THEMA Working Papers 2022-19, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    • Handle: RePEc:ema:worpap:2022-19
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    References listed on IDEAS

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    More about this item

    Keywords

    Carbon tax; Policy Evaluation; Manufacturing; France; Expectations.;
    All these keywords.

    JEL classification:

    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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