Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/316183 
Year of Publication: 
2025
Series/Report no.: 
Working Paper Series No. 27
Publisher: 
Bocconi University, Centre for Research on Geography, Resources, Environment, Energy and Networks (GREEN), Milan
Abstract: 
Environmental policies such as the European Union Emissions Trading System (EU ETS) raise concerns about their impact on local employment and competitiveness. Yet, existing EU ETS studies focus on firm-level outcomes during the initial phases of the program. We construct a panel dataset of about 900 European provinces across 2008 to 2020 to assess the effects of a significant policy change in Phase 3 of the EU ETS. Specifically, we investigate how the changes in the allocation of free allowances affected local economies in terms of employment, gross value added (GVA) and productivity. By assembling a novel dataset and measuring the net change of paid emissions from Phase 2 to Phase 3 we construct a measure of exposure to the policy change at the NUTS-3 level. Using synthetic difference-in-differences, we find that being more exposed to the EU ETS is associated with a statistically significant contraction of employment and GVA in the more carbon-intensive industries. Our results are complemented with evidence on a sizeable reduction in carbon emissions and mild impact in terms of regional disparities in the European Union.
Subjects: 
EU ETS
Carbon policies
CO2 Emissions
Regional Economics
Economic Geography
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.