Skip to main content
Event_

Do carbon markets undermine private climate initiatives?

Sep 6, 2024 11:00 am - 12:30 pm AEST
Rm 5040, Level 5 ,
Belinda Hutchinson Building (H70)
The University of Sydney

Abstract

We study commitments to reduce emissions by firms subject to the European Union Emission Trading System (EU ETS), the world’s largest cap-and-trade program. Commitments are associated with a drop in the number of carbon allowances surrendered, consistent with firms taking actions to reduce their emissions. However, firms subsequently increase their sales of allowances on the secondary market, transferring the right to pollute to others and potentially leaving aggregate emissions unchanged. Despite this, firms benefit from commitments via higher ESG scores. Our results highlight the need for researchers, practitioners, and policymakers to consider the interaction between carbon markets and private climate initiatives.

Presented by Ian Appel.

Presenter

Ian Appel
University of Virginia

More information

  • Pramod Kumar Yadav
Email