Carbon price and firm greenhouse gas emissions

Adamolekun, Gbenga

Abstract

Drawing on the recent enthusiasm in the carbon markets, I examine the impact of carbon prices on firm greenhouse gas (GHG) emissions. Using a sample of 1591 firms from 23 European countries, I demonstrate that an increase in carbon price decreases corporate GHG. At hypothesized higher carbon pricing levels, I document that the effect of pricing on corporate GHG emissions is negative. The negative impact of high carbon prices manifests in other harmful gases such as sulphur and volatile organic compounds (VOCs). In evaluating how the various phases of the EU emission trading scheme have affected firm greenhouse gas emissions, I show that the negative effect of pricing became pronounced in Phase 3 of the EU ETS. The findings from this study are robust to alternative econometric specifications and further sample selection criteria.

Citation

Adamolekun, G. (2024). Carbon price and firm greenhouse gas emissions. Journal of Environmental Management, 349, Article 119496. https://doi.org/10.1016/j.jenvman.2023.119496

• Journal Article Type: Article
• Acceptance Date: Oct 28, 2023
• Online Publication Date: Nov 10, 2023
• Publication Date: 2024-01
• Deposit Date: Nov 10, 2023
• Publicly Available Date: Nov 13, 2023
• Journal: Journal of Environmental Management
• Print ISSN: 0301-4797
• Electronic ISSN: 1095-8630
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 349
• Article Number: 119496
• DOI: https://doi.org/10.1016/j.jenvman.2023.119496
• Keywords: Carbon price, Firm greenhouse gas emissions, Sulphur, Volatile organic compounds (VOCs), EU ETS
• Public URL: http://researchrepository.napier.ac.uk/Output/3373907