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Environmental protection expenditures and EU ETS: Evidence from Romania

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  • Purcel, Alexandra-Anca

Abstract

We examine the impact of the European Union Emissions Trading System (EU ETS) on environmental protection expenditures over 2014–2015 for a representative sample of firms, which activate on Romanian territory. First, the findings reveal that EU ETS positively impacts current expenditures, namely, the short-time behavior of firms. Second, the results based on the investments selection model show that EU ETS has no statistically significant effect on the likelihood to invest, and the amount invested (i.e., long-term behavior). Overall, these results suggest that the EU ETS is a viable instrument, acting as a pivotal incentive for firms to undertake environmental expenditures.

Suggested Citation

  • Purcel, Alexandra-Anca, 2023. "Environmental protection expenditures and EU ETS: Evidence from Romania," Finance Research Letters, Elsevier, vol. 58(PB).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pb:s1544612323007900
    DOI: 10.1016/j.frl.2023.104418
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    More about this item

    Keywords

    Environmental expenditures and investments; EU ETS; Firms; Climate policy; Panel analysis;
    All these keywords.

    JEL classification:

    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q59 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Other

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