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Imported carbon emissions: evidence from French manufacturing companies

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  • Dussaux, Damien
  • Vona, Francesco
  • Dechezleprêtre, Antoine

Abstract

This paper analyzes imported carbon emission at the firm level. To do so, we combine information on emissions, imports, imported emissions and energy prices for French manufacturing firms between 1997 and 2014. We document a significant increase of the carbon emissions embedded in imports of French manufacturing companies over the period 1997 to 2014 that is attributable mainly to a shift towards more carbon-intensive products and countries. We then estimate the impact of imported emissions on domestic emissions and emission intensity using a shift-share instrumental variable strategy based on third countries supply shocks. We do not find compelling evidence of an impact of carbon imports on total emissions, but emission efficiency improves significantly in companies offshoring emissions abroad. A 10% increase in carbon offshoring causes a 4% decline in emission intensity. In addition, we find that the elasticity of domestic emission intensity to imported emissions is stronger in energy-intensive sectors, on high-productivity companies and among exporters. Reassuringly, the relationship between imported emissions and emission intensity does not seem to be driven by a pollution haven motive.

Suggested Citation

  • Dussaux, Damien & Vona, Francesco & Dechezleprêtre, Antoine, 2023. "Imported carbon emissions: evidence from French manufacturing companies," LSE Research Online Documents on Economics 118751, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:118751
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    2. Rottner, Elisa, 2023. "Do climate policies lead to outsourcing? Evidence from firm-level imports," ZEW Discussion Papers 23-070, ZEW - Leibniz Centre for European Economic Research.
    3. Wang, Shufei & Ma, Xinyu & Zhang, Xiang & Kang, Meiling, 2024. "Can foreign demand shocks reduce the pollution emission intensity? Evidence from exporters in China," Energy Economics, Elsevier, vol. 133(C).
    4. Haas, Levi & Schenk-Hoppé, Klaus R., 2019. "International Trade: Smarten up to talk the talk," MPRA Paper 99096, University Library of Munich, Germany.
    5. Delera, Michele, 2021. "Is production in global value chains (GVCs) sustainable? A review of the empirical evidence on social and environmental sustainabilitiy in GVCs," PEGNet Policy Studies 04/2020, PEGNet - Poverty Reduction, Equity and Growth Network, Kiel Institute for the World Economy (IfW Kiel).
    6. Aliénor Cameron & Marc Baudry, 2023. "The case for carbon leakage and border adjustments: where do economists stand?," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 25(3), pages 435-469, July.

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    • F18 - International Economics - - Trade - - - Trade and Environment
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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