Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/319628 
Year of Publication: 
2025
Series/Report no.: 
Deutsche Bundesbank Discussion Paper No. 14/2025
Publisher: 
Deutsche Bundesbank, Frankfurt a. M.
Abstract: 
The introduction of the EU Carbon Border Adjustment Mechanism (CBAM) has triggered statistically significant negative stock market responses for firms within the EU. Comparing EU customers that have non-EU suppliers in CBAM-affected industries with their non- treated peers in the control group, we find an extra cumulative abnormal return of up to -1.3 percentage points over our main five-day event window around December 13, 2022. Fur- thermore, we document substantial anticipatory market responses reflecting updated beliefs about broader climate policy developments going forward. This paper is the first to provide empirical evidence of carbon border tax impacts on firm valuations through international supply chains. Our findings contribute to the understanding of climate policy transmission through international trade networks and inform the debate on stranded assets resulting from environmental regulations.
Subjects: 
Carbon border adjustment mechanism
carbon pricing
supply chain
event study
cumulative abnormal returns
trade
JEL: 
G12
G14
G15
Q58
ISBN: 
978-3-98848-035-4
Document Type: 
Working Paper

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