Policy Papers
Carbon Border Adjustments: The potential effects of the EU CBAM along the supply chain
with Antoine Dechezleprêtre, Antton Haramboure, Guy Lalanne, and Norihiko Yamano
Abstract: Disparities in carbon pricing and other climate policies across countries can raise the risk of carbon leakage. To address this, the European Union introduced a Carbon Border Adjustment Mechanism (CBAM) which will require importers of certain energy-intensive goods to pay a levy on embedded emissions. This paper combines multiple data sources to measure the coverage of the CBAM in terms of trade flows and emissions and uses an enhanced input-output model to simulate the impact of the CBAM on value added and emissions across sectors and countries, accounting for supply chain linkages. Results show that the CBAM can effectively prevent carbon leakage. However, it only partially mitigates the negative effects of higher carbon prices and free allowances removal on the value added of CBAM-protected industries and negatively affects downstream EU industries.
with Frida Aulie, Antoine Dechezleprêtre, Fernando Galindo-Rueda, Inès Pitavy, and Alzbeta Vitkova
Abstract: Fiscal spending policies adopted in the wake of the COVID-19 pandemic have been presented as a unique opportunity to “build back better” and re-ignite the economy while accelerating the transition to a low-carbon economy. This paper analyses 1 166 funding measures announced by 51 countries and the European Union in 2020-21 to support development and diffusion of low-carbon technologies. These measures – amounting to USD 1.29 trillion – can make an important contribution to filling the climate investment gap, particularly in emerging technologies such as carbon capture, usage and storage and green hydrogen. A modelling analysis suggests that they could greatly impact greenhouse gas emissions and bring about significant co-benefits in terms of clean sectors’ output growth and reductions in fossil fuel imports.
Gender diversity in senior management and firm productivity: Evidence from nine OECD countries
with Chiara Criscuolo, Peter Gal, and Cyrille Schwellnus
Abstract: This paper investigates the link between gender diversity in senior management and firm-level productivity. For this purpose, it constructs a novel cross-country dataset with information on firms’ senior management group and other firm characteristics, covering both publicly listed and unlisted firms in manufacturing and non-financial market services across nine OECD countries. The main result from the analysis is that productivity gains from increasing gender diversity in senior management are highest among firms with low initial diversity. Increasing the female share to the sample average of 20% in firms with initially lower shares would increase aggregate productivity by around 0.6%. This suggests that improving women’s access to senior management positions matters not only for equity but could yield significant productivity gains.
Working Papers
The impact of air pollution on labour productivity in France
Abstract: This paper investigates the effect of air pollution on labour productivity in French establishments in both manufacturing and non-financial market services sectors from 2001 to 2018. An instrumental variable approach based on planetary boundary layer height and wind speed allows identifying the causal effect of air pollution on labour productivity. The finding shows that a 10% increase in fine particulate matter leads, on average, to a 1.5% decrease in labour productivity, controlling for firm-specific characteristics and other confounding factors. The analysis also considers different dimensions of heterogeneity driving this adverse effect and finds that the negative impact of pollution is mainly driven by skill-intensive and service-intensive firms. This finding is in line with the expectation that air pollution affects cognitive skills, concentration, headache, and fatigue in non-routine cognitive tasks. Compared to the marginal abatement cost of PM 2.5 reductions by the Air Quality Directive 2008/50/EC, the estimated gains only from the labour productivity channel could largely offset the abatement cost.
Work in Progress
Technology diffusion, intangible intensity, and collateral constraints (joint work with Flavio Calvino, Francesco Manaresi and Rudy Verlhac)