The Effects of Carbon Trading: Evidence from California’s ETSNiklas Kramer and Christian Lessmann MPRA Paper from University Library of Munich, Germany Abstract: We study the impact of California’s emission trading scheme on carbon emissions and economic outcomes. We use panel data for all US states and apply the synthetic control method to construct an optimal counterfactual for CO2 emissions, GDP, employment, and industry turnover as outcome variables. We find evidence for a modest decline in emissions and a net positive aggregate economic effect. While we estimate overall emissions to fall relative to the counterfactual by 0.9% annually and by 6.3% in total between 2013 and 2019, the effect is most evident in the electricity and buildings sector, accounting for an annual abatement of 6.2% and 1.4%, respectively. Our estimates suggest that California’s carbon trading scheme has so far not caused large reductions in overall CO2 emissions and has positively affected macroeconomic outcomes in the short run. Keywords: Carbon pricing; emission trading; cap and trade; economic effects; emission reduction; synthetic control (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:116796 Access Statistics for this paper More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC. |
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