The Impacts of the Climate Change Levy on Manufacturing: Evidence from Microdata

62 Pages Posted: 24 Sep 2011 Last revised: 4 Mar 2021

See all articles by Ralf Martin

Ralf Martin

London School of Economics & Political Science (LSE) - Department of Economics; Imperial College Business School

Laure de Preux

Imperial College Business School

Ulrich J. Wagner

University of Mannheim - Department of Economics

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Date Written: September 2011

Abstract

We estimate the impacts of the Climate Change Levy (CCL) 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 CCL and plants that were granted an 80% discount on the levy after joining a Climate Change Agreement (CCA). Exploiting exogenous variation in eligibility for CCA participation, we find that the CCL had a strong negative impact on energy intensity and electricity use. We cannot reject the hypothesis that the tax had no detrimental effects on economic performance and on plant exit.

Suggested Citation

Martin, Ralf and de Preux, Laure and Wagner, Ulrich J., The Impacts of the Climate Change Levy on Manufacturing: Evidence from Microdata (September 2011). NBER Working Paper No. w17446, Available at SSRN: https://ssrn.com/abstract=1933049

Ralf Martin (Contact Author)

London School of Economics & Political Science (LSE) - Department of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom

Imperial College Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

Laure De Preux

Imperial College Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

Ulrich J. Wagner

University of Mannheim - Department of Economics ( email )

D-68131 Mannheim
Germany

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