Imported carbon emissions: evidence from French manufacturing companies

Dussaux, Damien, Vona, Francesco and Dechezleprêtre, Antoine (2023) Imported carbon emissions: evidence from French manufacturing companies. Canadian Journal of Economics, 56 (2). 593 - 621. ISSN 0008-4085

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Abstract

This paper analyzes imported carbon emission at the firm level. To do so, we combine information on emissions, imports, imported emissions and energy prices for French manufacturing firms between 1997 and 2014. We document a significant increase of the carbon emissions embedded in imports of French manufacturing companies over the period 1997 to 2014 that is attributable mainly to a shift towards more carbon-intensive products and countries. We then estimate the impact of imported emissions on domestic emissions and emission intensity using a shift-share instrumental variable strategy based on third countries supply shocks. We do not find compelling evidence of an impact of carbon imports on total emissions, but emission efficiency improves significantly in companies offshoring emissions abroad. A 10% increase in carbon offshoring causes a 4% decline in emission intensity. In addition, we find that the elasticity of domestic emission intensity to imported emissions is stronger in energy-intensive sectors, on high-productivity companies and among exporters. Reassuringly, the relationship between imported emissions and emission intensity does not seem to be driven by a pollution haven motive.

Item Type:	Article
Official URL:	https://onlinelibrary.wiley.com/journal/15405982
Additional Information:	© 2023 The Authors
Divisions:	Grantham Research Institute
Subjects:	H Social Sciences > HB Economic Theory
JEL classification:	F - International Economics > F1 - Trade > F18 - Trade and Environment F - International Economics > F1 - Trade > F14 - Country and Industry Studies of Trade Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q56 - Environment and Development; Environment and Trade; Sustainability; Environmental Accounting; Environmental Equity
Date Deposited:	27 Apr 2023 23:23
Last Modified:	18 Nov 2024 17:27
URI:	http://eprints.lse.ac.uk/id/eprint/118751

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