Hélène Ollivier

This paper shows that even moderate air pollution levels, such as those in Europe, harm the economy by reducing firm performance. Using monthly firm-level data from France, we estimate the causal impact of fine particulate matter (PM 2.5 ) on sales and worker absenteeism. Leveraging exogenous pollution shocks from local wind direction changes, we find that a 10 percent increase in monthly PM 2.5 exposure reduces firm sales by 0.4 percent on average over the next two months, with sector-specific variation.<p>Simultaneously, sick leave rises by 1 percent. However, this labor supply reduction explains only a small part of the sales decline. Our evidence suggests that air pollution also reduces worker productivity and dampens local demand. Aligning air quality with WHO guidelines would yield economic benefits on par with the costs of regulation or the health benefits from reduced mortality.</p>

The Clean Development Mechanism is one of three flexible mechanisms included in the Kyoto Protocol. It enables Annex I countries to finance emission reductions in developing (non-Annex I) countries and use the credits thus obtained to meet their quantified emission reduction commitments under the Kyoto Protocol. The CDM had two objectives: to reduce the costs of compliance of the Annex I countries’ emission reduction commitments, and to assist developing countries in achieving sustainable development and in contributing to the ultimate objective of the UNFCCC. The major part of certified emission reductions (CERs) comes from renewable energy investments, reduction of non-CO2 greenhouse gases (HFCs, PFCs and N2O), and energy efficiency projects. The geographical distribution of projects and emission reductions is concentrated in a few countries: China, India, Brazil, and Mexico. A substantial amount of CERs was created under the CDM, but the uneven geographical distribution of projects and the lack of consistent control of projects’ contribution to sustainable development have been arguments to contend that the CDM did not fulfil its initial objectives. The restriction by the EU in 2013 to use CERs in the EU-ETS brought down prices and the market for CERs has not recovered since. The CDM was discontinued as of 30 June 2022 and requests for exemptions were considered on a case-specific basis. Nevertheless, the CDM has continued to function while parties are waiting for the flexible mechanisms created in the Paris Agreement of 2015 to become operational, in particular the Sustainable Development Mechanism of Article 6.4 which is similar to the CDM in its objectives.

Ce projet documente et analyse l’impact des aides à la décarbonation sur trois volets : le ciblage et le recours aux aides du plan France Relance, les effets économiques et environnementaux des précédentes vagues d’aides à la décarbonation et en particulier du Fonds Chaleur administré par l’Ademe, et les premiers effets rétrospectifs des impacts économiques des aides à la décarbonation du plan France Relance.

This study examines the causal impacts of the Clean Development Mechanism (CDM) on the environmental performance of Indian manufacturing firms, as measured by their energy use, carbon dioxide (CO2) emissions, and intensities of CO2 emissions per sales and per energy use. The impacts of CDM projects are estimated using either two-way fixed-effect regressions or an estimator built for an event study with staggered treatment (Sun and Abraham, 2021) combined with a sample of ever-treated firms only or a sample comparing treated to never-treated control firms using semi-parametric matching. We found that CDM projects significantly increased firms’ CO2 emissions and energy use after treatment, but had no effect on CO2 emission intensity per sales and only a small negative effect on the CO2 content of energy use (only for the matched sample). These results reveal that CDM projects led to a positive scale effect (increased sales) after investments were made, and that these investments triggered a limited emission-reducing technique effect (decreased CO2 intensity).