The Effect of Carbon Pricing on Firm Emissions: Evidence from the Swedish CO2 Tax

Gustav Martinsson, László Sajtos, Per Strömberg and Christian Thomann

The Review of Financial Studies, 2024, vol. 37, issue 6, 1848-1886

Abstract: Sweden was one of the first countries to introduce a carbon tax back in 1991. We assemble a unique data set tracking CO2 emissions from Swedish manufacturing firms over 26 years to estimate the impact of carbon pricing on firm-level emission intensities. We estimate an emission-to-pricing elasticity of around two, with substantial heterogeneity across subsectors and firms, where higher abatement costs and tighter financial constraints are associated with lower elasticities. A simple calibration suggests that 2015 CO2 emissions from Swedish manufacturing would have been roughly 30% higher without carbon pricing.

Keywords: H23; Q54; Q58; G32 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (5)

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