Julien Sauvagnat

Interdisciplinary seminars
finance seminar

Julien Sauvagnat

Bocconi University
Corporate Taxation and Carbon Emissions
Joint with
Luigi Iovino, Thorsten Martin

MEGA Salle Plot 2 - 2e étage

MEGA - Salle Plot 2 - 2e étage

Maison de l'économie et de la gestion d'Aix
424 chemin du viaduc
13080 Aix-en-Provence

Tuesday, May 21 2024| 10:30am to 12:00pm

Eric Girardin: eric.girardin[at]univ-amu.fr
Gaël Leboeuf: gael.leboeuf[at]univ-amu.fr
Christelle Lecourt: christelle.lecourt[at]univ-amu.fr


We study the relationship between corporate taxation and carbon emissions in the U.S. We show that dirty firms pay lower profit taxes. This relationship is driven by dirty firms benefiting disproportionately more from the tax shield of debt due to their higher leverage. In addition, we document that the higher leverage of dirty firms is fully accounted for by the larger share of tangible assets owned by such firms. We build a general-equilibrium multi-sector economy and show that a revenue-neutral increase in profit taxation could lead to large decreases in aggregate carbon emissions without any noticeable change in GDP.