Firms differ in what intermediates they source from which countries. Countries and intermediates in turn differ greatly in their CO2 intensity of production. Which sourcing strategies firms choose, therefore, has important implications not only for their economic, but also for their climate performance. Climate and energy policies arguably have an impact on firms' sourcing strategies. In this project, we quantify the effect of climate policies on the productivity and emission of French firms by means of production function estimation. We estimate the substitutability between energy, imports, and domestic material purchases for different intermediates. On the basis of these estimates, we will analyse the effects of the EU's carbon border adjustment mechanism (CBAM) on productivity, employment and emissions in French manufacturing firms.
Sourcing strategies and climate policies
Data provided through CASD (13)
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