Real effects of climate policy: Financial constraints and spillovers

• 成果类型: Article
• 署名作者: Bartram, Sohnke M.; Hou, Kewei; Kim, Sehoon
• 署名单位: University of Warwick; Centre for Economic Policy Research - UK; University System of Ohio; Ohio State University; State University System of Florida; University of Florida
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2021.06.015
• 发表日期: 2022
• 页码: 668-696
• 关键词: climate policy; California cap-and-trade; financial constraints; Internal resource allocation; Regulatory arbitrage; Spillover effects

摘要

We document that localized policies aimed at mitigating climate risk can have unintended consequences due to regulatory arbitrage by firms. Using a difference-in-differences framework to study the impact of the California cap-and-trade program with U.S. plant-level data, we show that financially constrained firms shift emissions and output from California to other states where they have similar plants that are underutilized. By contrast, unconstrained firms do not make such adjustments. Overall, unconstrained firms do not reduce their total emissions, whereas constrained firms increase their total emissions after the cap-and-trade rule, undermining the effectiveness of the policy. (c) 2021 Elsevier B.V. All rights reserved.