Did the EU ETS make a difference? An empirical assessment using Lithuanian firm-level data
AbstractWe use a panel dataset of about 5,000 Lithuanian firms between 2003 and 2010, to assess the impact of the EU ETS on the environmental and economic performance of participating firms. Using a matching methodology, we are able to estimate the causal impact of EU ETS participation on CO2 emissions, CO2 intensity, investment behaviour and profitability of participating firms. Our results show that ETS participation did not lead to a reduction in CO2 emissions, while we identify a slight improvement in CO2 intensity. ETS participants are shown to have retired part of their less efficient capital stock, and to have made modest additional investments from 2010. We also show that the EU ETS did not represent a drag on the profitability of participating firms.
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Bibliographic InfoPaper provided by CERE - the Center for Environmental and Resource Economics in its series CERE Working Papers with number 2014:2.
Length: 41 pages
Date of creation: 21 Jan 2014
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Web page: http://www.cere.se
Cap and trade; CO2 emissions; EU emissions trading system; ex-post evaluation; firm competitiveness; investment; matching; panel data; profits;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-02-02 (All new papers)
- NEP-ENE-2014-02-02 (Energy Economics)
- NEP-ENV-2014-02-02 (Environmental Economics)
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