Carbon prices and firms' financial performance: An industry perspective

Bert Scholtens*, Focko Van Der Goot

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)


This paper investigates how carbon prices influence the financial market value of the individual firm after Phase I of the EU's Emission Trading Scheme (ETS). The dataset covers 136 firms in the industries that are responsible for the majority of the greenhouse gas emission, namely the oil and gas, power and heat, cement and lime, and iron and steel industry. The paper basically follows the method and approach applied in Oberndorfer [27]. The results show there is a positive and significant effect of carbon price changes on stock market returns in all four industries. Furthermore, there is evidence for an asymmetric influence in all sectors apart from the oil & gas industry. Volatility of the market value of firms appears not be influenced by the volatility of the EU ETS carbon prices. The results appear to be robust against different specifications for the estimation of the variance. However, they are sensitive to different time periods, i.e., distinguishing between 2008-2009 and 2010-2011. We conclude that despite several inefficiencies, the EU ETS has a significant impact on the value of firms that are responsible for most of the carbon emissions in the EU.

Original languageEnglish
Pages (from-to)491-505
Number of pages15
JournalCarbon Management
Issue number5-6
Publication statusPublished - 2014


  • Asymmetry
  • EU ETS
  • Industries
  • Stock market returns
  • Volatility


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