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The impact of the European Union Emission Trading Scheme on Multiple Measures of Economic Performance

Author

Listed:
  • Giovanni Marin

    (Università degli Studi di Urbino 'Carlo Bo', UniFE - Università degli Studi di Ferrara = University of Ferrara)

  • Marianna Marino

    (ICN Business School, BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique)

  • Claudia Pellegrin

    (EPFL - Ecole Polytechnique Fédérale de Lausanne)

Abstract

The European Emission Trading Scheme (EU ETS) has introduced a price for carbon, thus generating an additional cost for companies that are regulated by the scheme. The objective of this paper is to provide empirical evidence on the effect of the EU ETS on firm-level economic performance. There is a growing body of empirical literature that investigates the effects of the EU ETS on firm economic performance, with mixed results. Differently from the previous literature, we test the effect of the EU ETS on a larger set of indicators of economic performance: employment, average wages, turnover, value added, markup, investment, labour productivity, total factor productivity and ROI. Our results, based on a large panel of European firms, provide a broad picture of the economic impact of the EU ETS in its first and second phases of implementation. Contrarily to the expectations, the EU ETS did not affect economic performance negatively. Results suggest that firms have reacted to the EU ETS by passing-through costs to their customers on the one hand and improving labour productivity on the other hand.

Suggested Citation

  • Giovanni Marin & Marianna Marino & Claudia Pellegrin, 2018. "The impact of the European Union Emission Trading Scheme on Multiple Measures of Economic Performance," Post-Print hal-01768870, HAL.
    • Handle: RePEc:hal:journl:hal-01768870
    DOI: 10.1007/s10640-017-0173-0
    Note: View the original document on HAL open archive server: https://hal.science/hal-01768870
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    References listed on IDEAS

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    European Emission Trading Scheme; Economic performance;

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