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Did the EU ETS make a difference? An empirical assessment using Lithuanian firm-level data

Author

Listed:
  • Jarait, Jurate

    () (CERE, Umeå University)

  • Di Maria, Corrado

    (University of East Anglia)

Abstract

We 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.

Suggested Citation

  • Jarait, Jurate & Di Maria, Corrado, 2014. "Did the EU ETS make a difference? An empirical assessment using Lithuanian firm-level data," CERE Working Papers 2014:2, CERE - the Center for Environmental and Resource Economics.
  • Handle: RePEc:hhs:slucer:2014_002
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Joltreau, Eugénie & Sommerfeld, Katrin, 2016. "Why does emissions trading under the EU ETS not affect firms' competitiveness? Empirical findings from the literature," ZEW Discussion Papers 16-062, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    2. Marit E. Klemetsen & Knut Einar Rosendahl & Anja Lund Jakobsen, 2016. "The impacts of the EU ETS on Norwegian plants' environmental and economic performance," Discussion Papers 833, Statistics Norway, Research Department.
    3. Raphael Calel, 2018. "Adopt or Innovate: Understanding Technological Responses to Cap-and-Trade," CESifo Working Paper Series 6847, CESifo Group Munich.
    4. repec:eee:eecrev:v:98:y:2017:i:c:p:373-391 is not listed on IDEAS
    5. Löschel, Andreas & Lutz, Benjamin Johannes & Managi, Shunsuke, 2016. "The impacts of the EU ETS on efficiency: An empirical analyses for German manufacturing firms," ZEW Discussion Papers 16-089, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    6. Germeshausen, Robert, 2018. "The European Union emissions trading scheme and fuel efficiency of fossil fuel power plants in Germany," ZEW Discussion Papers 18-007, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    7. Lutz, Benjamin Johannes, 2016. "Emissions trading and productivity: Firm-level evidence from German manufacturing," ZEW Discussion Papers 16-067, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

    More about this item

    Keywords

    Cap and trade; CO2 emissions; EU emissions trading system; ex-post evaluation; firm competitiveness; investment; matching; panel data; profits;

    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

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