Trading of emission allowances and reporting incentives

• 成果类型: Article
• 署名作者: N'Gatta, Donald; Ormazabal, Gaizka; Raney, Robert
• 署名单位: University of Navarra; IESE Business School
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101; 1879-1980
• DOI: 10.1016/j.jacceco.2025.101804
• 发表日期: 2025
• 页码: 101804
• 关键词: reporting incentives; Financial and climate accounting; Emission trading; Emission allowance; Pollution pricing; REAL ACTIVITIES MANIPULATION; earnings management; accruals; COMPENSATION; performance; PRIVATE

摘要

This paper examines the role of reporting incentives on the trading of emission allowances. Our tests are based on a wide international sample of firms and data from the European Union Emission Trading System (EU ETS), which is the most liquid and developed in the world. We find evidence consistent with the notion that excess allowances combined with historical cost accounting for emission rights provide firms the opportunity to obtain a reporting benefit from selling emission allowances. We observe more frequent selling of allowances when the transactions are likely to boost earnings to avoid accounting losses. The documented trading activity increases in the ETS market towards the end of the year and is associated with selling imbalance and effects on carbon pricing, which in turn affect firms' emission abatement incentives. Our results have implications for the debate on the institutional design of carbon markets and on the need to define an accounting standard for emission allowances.