The Academic Insight is based on the research article: “The Effect of Carbon Pricing on Firm Emissions: Evidence from the Swedish CO2 Tax” published in the Review of Financial Studies in 2024.

Swift policy action is essential to address human-caused climate change. Economists propose a global carbon tax, possibly paired with green innovation subsidies, as a key solution. While there is no universal agreement on this, several countries and also the EU have implemented carbon pricing. However, the effectiveness of these measures in reducing CO2 emissions from companies require further research.

To shed light on this issue, Misum researchers focus on Sweden, which implemented a carbon tax in 1991. They analyze a unique dataset covering CO₂ emissions from Swedish manufacturing firms over 26 years to estimate the impact of carbon pricing on firm-level emission intensities.

Read the full Misum Academic Insight here.

Authors:

• Gustav Martinsson, Stockholm Business School, Mistra Center For Sustainable Markets and Swedish House of Finance
• László Sajtos, Konjunkturinstitutet, Mistra Center For Sustainable Markets and Swedish House of Finance
• Per Strömberg, Stockholm School of Economics, Mistra Center For Sustainable Markets and Swedish House of Finance
• Christian Thomann, Royal Institute of Technology and Mistra Center For Sustainable Markets and Swedish House of Finance