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Profiting from Regulation: Evidence from the European Carbon Market

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dc.contributor.authorBushnell, James B.
dc.contributor.authorChong, Howard
dc.contributor.authorMansur, Erin T.
dc.date.accessioned2020-09-12T21:02:49Z
dc.date.available2020-09-12T21:02:49Z
dc.date.issued2013-11-01
dc.description.abstractWe investigate how cap-and-trade regulation affects profits. In late April 2006, the EU CO2 allowance price dropped 50 percent, equating to a € 28 billion reduction in the value of aggregate annual allowances. We examine daily returns for 552 stocks from the EUROSTOXX index. Despite reductions in environmental costs, we find that stock prices fell for firms in both carbon- and electricity-intensive industries, particularly for firms selling primarily within the EU. Our results imply that investors focus on product price impacts, rather than just compliance costs and the nominal value of pollution permits.
dc.description.legacydownloadsChong1_Profiting_from_regulation.pdf: 972 downloads, before Aug. 1, 2020.
dc.identifier.other6606724
dc.identifier.urihttps://hdl.handle.net/1813/71424
dc.language.isoen_US
dc.rightsRequired Publisher Statement: © American Economic Association. Reprinted with permission. All rights reserved.
dc.subjectemissions trading
dc.subjectregulation
dc.subjecteffects
dc.subjectstock prices
dc.subjectcarbon offsets
dc.subjectstatistical analysis
dc.titleProfiting from Regulation: Evidence from the European Carbon Market
dc.typearticle
local.authorAffiliationBushnell, James B.: University of California - Davis
local.authorAffiliationChong, Howard: hc757@cornell.edu Cornell University School of Hotel Administration
local.authorAffiliationMansur, Erin T.: Dartmouth College

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