Replication data for: Profiting from Regulation: Evidence from the European Carbon Market

Principal Investigator(s): View help for Principal Investigator(s) James B. Bushnell; Howard Chong; Erin T. Mansur

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Project Citation:

Bushnell, James B., Chong, Howard, and Mansur, Erin T. Replication data for: Profiting from Regulation: Evidence from the European Carbon Market. Nashville, TN: American Economic Association [publisher], 2013. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-13. https://doi.org/10.3886/E114845V1

Project Description

Summary: We investigate how cap-and-trade regulation affects profits. In late April 2006, the EU CO2 allowance price dropped 50 percent, equating to a €28 billion reduction in the value of aggregate annual allowances. We examine daily returns for 552 stocks from the EUROSTOXX index. Despite reductions in environmental costs, we find that stock prices fell for firms in both carbon- and electricity-intensive industries, particularly for firms selling primarily within the EU. Our results imply that investors focus on product price impacts, rather than just compliance costs and the nominal value of pollution permits.

Scope of Project

JEL Classification:
      G12 Asset Pricing; Trading Volume; Bond Interest Rates
      G14 Information and Market Efficiency; Event Studies; Insider Trading
      L94 Electric Utilities
      Q53 Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
      Q54 Climate; Natural Disasters and Their Management; Global Warming
      Q58 Environmental Economics: Government Policy

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Published Versions

V1 [2019-10-13]

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