Template-Type: ReDIF-Paper 1.0
Author-Name: Caterina Gennaioli
Author-X-Name-First: Caterina
Author-X-Name-Last: Gennaioli
Author-Email: c.gennaioli@qmul.ac.uk 
Author-Workplace-Name: School of Business and Management, Queen Mary University of London.
Author-Name: Antoine Dechezleprêtre
Author-X-Name-First: Antoine
Author-X-Name-Last: Dechezleprêtre
Author-Email: a.dechezlepretre@lse.ac.uk
Author-Workplace-Name: Grantham Research Institute on Climate Change and the Environment,London School of Economics.
Author-Name: Ralf Martin 
Author-X-Name-First: Ralf
Author-X-Name-Last: Martin
Author-Email: r.martin@imperial.ac.uk
Author-Workplace-Name: Imperial College Business School, Imperial College London
Author-Name: Mirabelle Muuls
Author-X-Name-First: Mirabelle
Author-X-Name-Last: Muuls
Author-Email: m.muuls@imperial.ac.uk
Author-Workplace-Name: Imperial College Business School and Grantham Institute Climate Change and the Environment, Imperial College London
Author-Name: Thomas Stoerk
Author-X-Name-First: Thomas
Author-X-Name-Last: Stoerk
Author-Email: t.a.stoerk@lse.ac.uk
Author-Workplace-Name: Directorate-General for Climate Action, European Commission, Grantham Research Institute on Climate Change and the Environment, London School of Economics
Title: Searching for Carbon Leaks in Multinational Companies
Abstract: Does unilateral climate change policy cause companies to shift the location of production, thereby creating carbon leakage? In this paper, we analyse the effect of the European Union Emissions Trading System (EU ETS) on the geographical distribution of carbon emissions of multinational companies. The empirical evidence is based on unique data for the period 2007-2014 from the Carbon Disclosure Project, which tracks emissions of multinational businesses by geographical region. Because they already operate from multiple locations, multinational firms should be the most prone to carbon leakage. Our data includes regional emissions of 1,122 companies, of which 261 are subject to EU ETS regulation. We find no evidence that the EU ETS has led to a displacement of carbon emissions from Europe towards the rest of the world, including in countries with no climate policy in place and within energy-intensive companies. A large number of robustness checks confirm this finding. Overall, the paper suggests that modest differences in carbon prices between countries do not induce carbon leakage.
Length: 35 pages
Creation-Date: 2019-01 
Revision-Date: 
Publication-Status: 
Classification-JEL: H23, Q53, Q54, Q58
Keywords: Carbon leakage, EU-ETS, CO2 emissions, multinational companies 
File-URL: http://cgr.sbm.qmul.ac.uk/CGRWP97.pdf
Number: 97
Handle: RePEc:cgs:wpaper:97