Searching for carbon leaks in multinational companies

Does a unilateral climate change policy cause companies to shift the location of production, thereby creating carbon leakage? In this paper, we analyze effect European Union Emissions Trading System (EU ETS) on geographic distribution emissions by multinational companies. The empirical evidence is based unique data for period 2007–2014 from Carbon Disclosure Project, which tracks businesses region within each company. Because they already operate multiple locations, firms should be most prone leakage. Our includes regional 1,122 companies, 261 are subject EU ETS regulation. We find no that has led displacement Europe toward rest world, including countries with lax policies and energy-intensive A large number robustness checks confirm finding. Overall, paper suggests modest differences in prices between do not induce