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The impact of a carbon tax on manufacturing: evidence from microdata

Ralf Martin (), Laure de Preux () and Ulrich Wagner ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We estimate the impact of a carbon tax 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 full tax and plants that paid only 20% of the tax. Exploiting exogenous variation in eligibility for the tax discount, we find that the carbon tax had a strong negative impact on energy intensity and electricity use. No statistically significant impacts are found for employment, revenue or plant exit.

Keywords: carbon tax; climate change levy; energy use; manufacturing; policy evaluation; UK; RES-000-22-2711 (search for similar items in EconPapers)
JEL-codes: D21 H23 Q41 Q48 Q54 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene, nep-env, nep-eur, nep-pub and nep-reg
Date: 2014-09
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Published in Journal of Public Economics, September, 2014, 117, pp. 1-14. ISSN: 0047-2727

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http://eprints.lse.ac.uk/57349/ Open access version. (application/pdf)

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Journal Article: The impact of a carbon tax on manufacturing: Evidence from microdata (2014) Downloads
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