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Environmental and Resource Economics

, Volume 71, Issue 2, pp 551–582 | Cite as

The Impact of the European Emission Trading Scheme on Multiple Measures of Economic Performance

  • Giovanni Marin
  • Marianna Marino
  • Claudia Pellegrin
Article

Abstract

The European Emission Trading Scheme (EU ETS) has introduced a price for carbon, thus generating an additional cost for companies that are regulated by the scheme. The objective of this paper is to provide empirical evidence on the effect of the EU ETS on firm-level economic performance. There is a growing body of empirical literature that investigates the effects of the EU ETS on firm economic performance, with mixed results. Differently from the previous literature, we test the effect of the EU ETS on a larger set of indicators of economic performance: employment, average wages, turnover, value added, markup, investment, labour productivity, total factor productivity and ROI. Our results, based on a large panel of European firms, provide a broad picture of the economic impact of the EU ETS in its first and second phases of implementation. Contrarily to the expectations, the EU ETS did not affect economic performance negatively. Results suggest that firms have reacted to the EU ETS by passing-through costs to their customers on the one hand and improving labour productivity on the other hand.

Keywords

European Emission Trading Scheme Economic performance Propensity score matching Difference-in-differences 

JEL Classification

Q52 Q58 

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Copyright information

© Springer Science+Business Media B.V. 2017

Authors and Affiliations

  • Giovanni Marin
    • 1
    • 2
  • Marianna Marino
    • 3
    • 4
  • Claudia Pellegrin
    • 5
  1. 1.Department of EconomicsSociety and Politics. University of Urbino ‘Carlo Bo’UrbinoItaly
  2. 2.SEEDSFerraraItaly
  3. 3.Department of Strategy and EntrepreneurshipICN Business School, Nancy/MetzNancyFrance
  4. 4.France Bureau d’Économie Théorique et Appliquée (BETA)Université de LorraineNancyFrance
  5. 5.Chair of Economics and Management of InnovationCollege of Management of Technology (CEMI-CDM), École Polytechnique Fédérale de Lausanne (EPFL)LausanneSwitzerland

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