Rewiring Supply Chains Through Uncoordinated Climate Policy

Emanuela Benincasa, Olimpia Carradori, Miguel A. Ferreira and Emilia Garcia-Appendini
Additional contact information
Emanuela Benincasa: Swiss Finance Institute; University of Zurich - Department of Finance
Olimpia Carradori: Swiss Finance Institute - University of Zurich
Miguel A. Ferreira: Nova School of Business and Economics; European Corporate Governance Institute (ECGI); Centre for Economic Policy Research (CEPR)

No 24-56, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: We show that climate transition risks can significantly disrupt supply chain networks. Specifically, suppliers affected by the California cap-and-trade program are more likely to lose customer relationships and less likely to form new ones compared to their competitors unaffected by the program. The effects are more pronounced among suppliers facing high competitive pressure and producing standardized inputs. Additionally, affected suppliers experience declines in revenues, assets, and profitability. This supply chain rewiring induced by uncoordinated climate policies is consistent with carbon leakage, as customers exposed to the program through production networks show an increase in their supply chain emission intensity.

Keywords: Climate finance; Carbon pricing policy; Carbon emissions; Supply chain; Product market competition; Input specificity (search for similar items in EconPapers)
JEL-codes: G32 Q54 Q55 (search for similar items in EconPapers)
Pages: 72 pages
Date: 2024-10
New Economics Papers: this item is included in nep-ene and nep-env
References: Add references at CitEc
Citations:

Downloads: (external link)
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4994643 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2456

Access Statistics for this paper

More papers in Swiss Finance Institute Research Paper Series from Swiss Finance Institute Contact information at EDIRC.
Bibliographic data for series maintained by Ridima Mittal ().