Skip to main content
Article thumbnail
Location of Repository

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

By Ralf Martin, Ulrich J. Wagner and Laure B. de Preux


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.Climate policy, carbon tax, United Kingdom, manufacturing, impact assessment

OAI identifier:

Suggested articles


  1. (1999). and Energy
  2. (2007). Assessing the performance of the UK Emissions Trading Scheme.
  3. (2003). Building the evidence base for productivity policy using business data linking. Economic Trends,
  4. (2002). Business data linking: an introduction. Economic Trends,
  5. (2007). Climate Change
  6. (2004). Climate Change Agreements - Results of the First Target Period Assessment.
  7. (2005). Climate Change Agreements - Results of the Second Target Period Assessment.
  8. (2007). Climate Change Agreements - Results of the Third Target Period Assessment.
  9. (2001). Climate Change Agreements - Sectoral Energy Efficiency Targets.
  10. (2004). Did the Clean Air Act cause the remarkable decline in sulfur dioxide concentrations?
  11. (1990). Economic instruments for environmental regulation.
  12. (1996). Effects of air quality regulation.
  13. (2000). Effects of air quality regulations on polluting industries.
  14. (2003). Effects of environmental regulations on manufacturing plant births: evidence from a propensity score matching estimator. The Review of Economics and
  15. (2006). Energy efficiency and productivity of UK businesses: Evidence from a new matched database.
  16. (2000). Energy Paper 68: Energy Projections for the UK - Energy Use and Energy-Related Emissions of Carbon Dioxide in the UK,
  17. (2002). Energy taxes, voluntary agreements and investment subsidies – a micro-panel analysis of the effect on
  18. Energy Technology Perspectives - Scenarios and Strategies to 2050. International Energy Agency,
  19. (2001). Environmental regulation and productivity: evidence from oil refineries. The Review of Economics and
  20. Environmentalregulationsandmanufacturers’locationchoices: Evidence from the Census of Manufactures.
  21. (2010). Estimating the effect of a gasoline tax on carbon emissions.
  22. (2004). Evaluating the employment impact of a mandatory job search assistance program.
  23. (1989). Firm incentives to promote technological change in pollution control.
  24. (2004). Hysteresis and Energy demand: the Announcement Effects and the Effects of the UK Climate Change Levy.
  25. (2007). Macroeconomic effects of efficiency policies for energy-intensive industries:
  26. (1972). Markets in licenses and efficient pollution control programs.
  27. (2005). Modelling the Initial Effects of the Climate Change Levy.
  28. (2003). Plant vintage, technology, and environmental regulation.
  29. (1995). Production Functions: The Search for Identification. NBER Working Paper 5067,
  30. (2005). Public disclosure of private information as a tool for regulating environmental emissions: firm-level responses by petroleum refineries to the Toxics Release Inventory.
  31. (2003). Regulation and capitalization of environmental amenities: evidence from the Toxic Release Inventory in Massachusetts. The Review of Economics and
  32. Regulatory impact assessment - the Climate Change Levy.
  33. (2004). Stabilization wedges: solving the climate problem for the next 50 years with current technologies.
  34. The Climate Change Levy and Climate Change Agreements.
  35. The Climate Change Levy and the Negotiated Agreements.
  36. (2010). The Costs of Environmental Regulation in a Concentrated Industry.
  37. (2006). The environmental and economic impacts of the UK Climate Change Agreements. Energy Policy,
  38. (2002). The impacts of environmental regulations on industrial activity: evidence from the 1970 and 1977 Clean Air Act Amendments and the Census of Manufactures.
  39. (2006). The political economy of an energy tax: The United Kingdom’s Climate Change Levy.
  40. (2011). The problem of the commons: still unsettled after 100 years.
  41. (2003). The UK Climate Change Levy Agreements: Combining negotiated agreements with Tax and Emission trading.
  42. (2010). US environmental regulation and FDI: evidence from a panel of US-based multinational firms.
  43. (2011). What do emissions markets deliver and to whom? Evidence from Southern California’s NOx trading program.

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.