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Carbon Price and Industries

London Business School - LONDON - 2022

The Community Emissions Trading System (ETS) of the European union is one of the most important schemes for fighting against climate change. The carbon price is supposed to induce companies to reduce their greenhouse (GHG) emissions. Can the system achieve its objective? Is there a tradeoff between environmental protection and economic prosperity? These questions are essential for evaluating climate policies and adjusting our current approaches. The project relies on high frequency identification to estimate environmental and economic impacts of the carbon price. French data at the firm and establishment levels allow us to assess these impacts at a micro level and to identify transmission mechanisms. This complements our understanding on the impacts of carbon policies.