Speaker
Description
This paper delivers the first comprehensive analysis of how firms respond to carbon taxation in emerging economies. Our evidence builds on exhaustive administrative data from South Africa, the $13^{th}$ largest emitter worldwide. The presented results are twofold. First, we establish stylized facts on the types of firms that are affected, how much revenue is generated from which sector and which share of national emissions the tax is able to capture. Second, we study the dynamic impact of the carbon tax on firm-level outcomes such as sales, profits, capital and labor inputs. We show that the design of the South African Carbon Tax leads to substantial heterogeneity across sectors in terms of how strongly firms are affected. Contrary to the concern that carbon taxes may impede economic growth we measure no negative effects on firm performance on average. However, this result masks important heterogeneity as we indeed estimate substantial differences across affected industries.
