Carbon Offshoring and Environmental Policies: Evidence from French Manufacturing Companies, 1997-2014

Martedì, 11 febbraio 2020, ore 14.15, aula 32 (Fondazione Marco Biagi)

Autore:  Antoine Dechezleprêtre (OECD and LSE) , Damien Dussaux (OECD), Francesco Vona (OFCE - Sciences Po)

The efficiency of domestic carbon mitigation policies is challenged by the possibility of carbon leakage whereby carbon intensive industries relocates in less stringent countries. Our paper is the first to analyse this potential carbon leakage by combining information on emissions, imports, imported emissions and environmental policies from a unique dataset on 8,000 French manufacturing firms observed from 1997 to 2014. First, we build a novel firm-level measure of imported emissions and decomposing its evolution into a technique, a composition, an intensive scale and an extensive (entry and exit) scale effect. Second, we estimate the impact of imported emissions on firm’s domestic emission intensity using using a shift-share instrumental variable strategy. Finally, we jointly estimate the effect of imported emissions and firms’ energy cost that is used as a proxy for environmental policy stringency. We find that (i) imported emissions from the French manufacturing sector increased by 35% from 68 Mt CO2 in 1997 to 92 Mt CO2, (ii) the main drivers of this increase in aggregate imported emissions are a shift towards more carbon intensive partners and entry of new firms in the import market, (iii) a 1% increase in firms’ imports lead to a 0.5% reduction in firms’ domestic emission intensity, (iv) a 1% increase in domestic energy cost reduce firms’ emission intensity by 1.3%.
 

 

[Ultimo aggiornamento: 06/02/2020 13:46:56]