Working Paper: NBER ID: w17446
Authors: Ralf Martin; Laure B. de Preux; Ulrich J. Wagner
Abstract: We estimate the impacts of the Climate Change Levy (CCL) on manufacturing plants using panel data from the UK production census. Our identification strategy builds on the comparison of outcomes between plants subject to the CCL and plants that were granted an 80% discount on the levy after joining a Climate Change Agreement (CCA). Exploiting exogenous variation in eligibility for CCA participation, we find that the CCL had a strong negative impact on energy intensity and electricity use. We cannot reject the hypothesis that the tax had no detrimental effects on economic performance and on plant exit.
Keywords: Climate Change Levy; Manufacturing; Energy Intensity; CO2 Emissions; Climate Change Agreements
JEL Codes: D21; Q41; Q48; Q54
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| CCA participation (G52) | CCL participation (Z22) |
| CCL (A30) | energy intensity (L94) |
| CCL (A30) | share of energy expenditures in variable costs (Q40) |
| CCL (A30) | electricity use (L94) |
| CCL (A30) | total CO2 emissions (L71) |