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Carbon tax reform and French industry response Insights from panel data, 2005-2019

Mélanie Marten (melanie.marten@cyu.fr)
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Mélanie Marten: Université de Cergy-Pontoise, THEMA

No 2022-19, THEMA Working Papers from THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise

Abstract: This paper investigates the effects of the 2014 French carbon tax reform on plant manufacturing energy use patterns and employment outcomes using a linear panel event study specification spanning fifteen years. The analysis constructs a proxy for exposure and expected exposure to increasingly higher carbon pricing, as the rate was expected to reach e100 per tCO2 by 2030. A 10 percentage point (pp) increase in exposure is significantly associated with a 2.03 pp increase in the share of electricity over fossil fuel use. This increase is more likely driven by a decrease in total energy use, and particularly in fossil fuel use. Additional results uncover evidence of input shifting across fossil fuel inputs to the benefit of natural gas, as well as in improvements in energy efficiency. Findings does not suggest that exposure is associated with job losses on average

Keywords: Carbon tax; Policy Evaluation; Manufacturing; France; Expectations (search for similar items in EconPapers)
JEL-codes: D84 L6 Q48 Q52 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-ene, nep-env and nep-eur
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Persistent link: https://EconPapers.repec.org/RePEc:ema:worpap:2022-19

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