Preliminary Conference Programme

This paper examines how firms use carbon allowances to reduce corporate tax burdens by routing allowance transactions through internal trading hubs in low-tax jurisdictions and by exploiting fluctuations in carbon prices. Using a dataset that captures the universe of carbon-allowance transactions in the European Union Emissions Trading System (EU ETS) from 2014 to 2020, we document that roughly 35\% of corporate groups operate internal hubs that collect and redistribute allowances across affiliated entities required to surrender them. Many of these hubs are located in jurisdictions with low statutory tax rates or in recognized tax havens, resulting in significantly lower effective tax rates for hubs relative to other entities within the same multinational group. These internal reallocations of allowances generate substantial tax savings. We further document that such tax-motivated internal trading and profit shifting is associated with lower investment in decarbonization and higher volumes of allowance surrenders. Taken together, it appears as if tax avoidance alleviates the financial pressure to reduce emissions.

Corporate carbon disclosure is central to sustainability assessment and climate policy, yet firm-level emissions data remain incomplete and selectively reported. This paper investigates missing Scope 1 CO2 emissions assuming that firms behave strategically in their disclosure decisions. We model emissions reporting as a missing-not-at-random (MNAR) process in which voluntary disclosure depends on firms’ underlying emissions. Using U.S. firm-level data from 2012–2023, we implement an imputation framework that explicitly accounts for endogenous non-reporting. We find statistically significant evidence that higher-emitting firms are systematically less likely to disclose. Correcting for this behavior increases average Scope 1 emissions by 15–19% relative to conventional approaches, with the largest revisions concentrated in the upper tail of the emissions distribution. As a result, selective disclosure leads to substantial underestimation of aggregate corporate carbon damages, while preserving the return-emissions relationship observed among the subsample of disclosing firms.

This paper examines how the positive climate impact of startup innovation affects venture capital (VC) investment decisions. We build a novel dataset that quantifies the emissions reduction potential (ERP) of climate-tech startups and merge it with VC investment records across North America and Europe. We find that startups with higher ERPs attract larger investments. To establish causality, we conduct a field experiment in collaboration with the UN Women climate-tech Accelerator, angel investor networks, and VC firms. The results suggest that investors show greater interest in startups with higher ERPs and that both financial and non-pecuniary motives influence funding decisions.