The impacts of the EU ETS on efficiency and economic performance – An empirical analyses for German manufacturing firms

By Andreas Löschel, B. Lutz, Shunsuke Managi. Resource and Energy Economics, 2019

116 citations recorded by the source corpus.

Abstract We investigate the effect of the European Union Emissions Trading System (EU ETS) on the economic performance of manufacturing firms in Germany. Our difference-in-differences framework relies on several parametric conditioning strategies and nearest neighbor matching. As a measure of economic performance, we use the firm specific distance to the stochastic production frontier recovered from official German production census data. None of our identification strategies provide evidence for a statistically significant negative effect of emissions trading on economic performance. On the contrary, the results of the nearest neighbor matching suggest that the EU ETS rather had a positive impact on the economic performance of the regulated firms, especially during the first compliance period. A subsample analysis confirms that EU ETS increased the efficiency of treated firms in at least some two-digit industries.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/0169f4364fd9fe10899184616862fbfd9b60faaf

Citations in the corpus

• Green Innovation and Finance in Asia (2020, unknown): “…Emissions Trading System (EU ETS) led to greater efficiency across firms throughout the manufacturing sector during its first period of compliance (Löschel et al., 2019), the impacts of cap and trade systems on energy consumption and emissions patterns throughout Japan, China, and greater Asia…”