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Carbon intensity and corporate performance: A micro-level study of EU ETS industrial firms

Author

Listed:
  • Alienor Cameron

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Maria Garrone

Abstract

To reach its 2050 objective of carbon neutrality, the European Union (EU) must continue to step up its climate efforts, while ensuring the competitiveness of its industries is not harmed. The EU Emission Trading Scheme (ETS) is at the core of the bloc's industrial decarbonization efforts. This paper explores this topic by digging into whether there is a causal relationship between industrial firms' emission intensity and their economic and financial performance. We construct a dataset covering around 1,200 industrial firms covered by the EU ETS' third phase and estimate a novel indicator of volume-based emission intensities for these firms. Applying an IV approach to a within-firm panel model, we find that firms' emission intensity is negatively related to their corporate performance, and that this does not depend on the competitive environment they operate in.

Suggested Citation

  • Alienor Cameron & Maria Garrone, 2024. "Carbon intensity and corporate performance: A micro-level study of EU ETS industrial firms," Working Papers hal-04705368, HAL.
    • Handle: RePEc:hal:wpaper:hal-04705368
    Note: View the original document on HAL open archive server: https://hal.science/hal-04705368v1
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    File URL: https://hal.science/hal-04705368v1/document
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