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The impact of the European Emission Trading Scheme on multiple measures of economic performance

Author

Listed:
  • Giovanni Marin

    (IRCrES-CNR, Milano, Italy; SEEDS, Ferrara, Italy.)

  • Claudia Pellegrin

    (CEMI-CDM-EPFL, Lausanne, Switzerland.)

  • Marianna Marino

    (Department of Strategy and Innovation, ICN Business School, Nancy/Metz; France and Bureau d'Économie Théorique et Appliquée (BETA), Université de Lorraine, France)

Abstract

The European emission trading scheme (EU ETS) has introduced a price for carbon and has thus led to an additional cost for companies that are regulated by the scheme. There is a growing body of empirical literature that investigates the effects of the EU ETS on firm economic performance. However, the results found to date are mixed. The objective of this paper is to provide empirical evidence on the effect of the EU ETS on economic performance at the firm level. Differently from the previous literature, we test the effect of the EU ETS on a larger set of indicators of economic performance: value added, turnover, employment, investment, labour productivity, total factor productivity and markup. Moreover, we evaluate the extent to which the impact of the EU ETS differs depending on some observable features of firms. Our results, based on a large panel of European firms, provide a comprehensive picture of the economic impact of the EU ETS in its first and second phases of implementation. The evidence suggests that the EU ETS had a positive impact on the scale of treated firms, whereas it had a negative impact on scale-free aspects of economic performance.

Suggested Citation

  • Giovanni Marin & Claudia Pellegrin & Marianna Marino, 2015. "The impact of the European Emission Trading Scheme on multiple measures of economic performance," SEEDS Working Papers 2015, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Dec 2015.
  • Handle: RePEc:srt:wpaper:2015
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    References listed on IDEAS

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    More about this item

    Keywords

    European Emission Trading Scheme; economic performance; difference-in-differences; emission intensity; allowance trading; environmental patents;
    All these keywords.

    JEL classification:

    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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