VGSF - WU Vienna - LC

Per Strömberg, Stockholm School of Economics

Campus WU D3.0.225 11:00 - 12:15

Organizer VGSF

As part of the ser­ies of the "Fin­ance Re­search Sem­inar", VGSF wel­comes Per Strömberg from the Stock­holm School of Eco­nom­ics to present his re­search pa­per.
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Car­bon Pri­cing and Firm­-­Level CO2 Abate­ment: Evid­ence from a Quarter of a Cen­tury-Long Panel

Sweden was one of the first coun­tries to in­tro­duce a car­bon tax in 1991. We assemble a unique data­set track­ing all CO2 emis­sions from the Swedish man­u­fac­tur­ing sector to es­tim­ate the im­pact of car­bon pri­cing on firm­-­level emis­sion in­tens­it­ies. In panel re­gres­sions, span­ning 26 years and around 4,000 firms, we find a stat­ist­ic­ally ro­bust and eco­nom­ic­ally mean­ing­ful neg­at­ive re­la­tion­ship between emis­sions and mar­ginal car­bon pri­cing. We es­tim­ate an emis­sion-to-­pri­cing elasti­city of around two, al­beit with sub­stan­tial het­ero­gen­eity across man­u­fac­tur­ing sub­sect­ors. A sim­ple cal­ib­ra­tion im­plies that 2015 CO2 emis­sions from Swedish man­u­fac­tur­ing would have been roughly 30% higher without car­bon pri­cing.

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