SCCEI Seminar Series (Winter 2025)

Friday, February 28, 2025 | 12:00 pm -1:20 pm Pacific Time
Goldman Room E409, Encina Hall, 616 Jane Stanford Way

Firm Selection and Growth in Carbon Offset Markets: Evidence from the Clean Development Mechanism in China

Carbon offsets could reduce the global costs of carbon abatement, but there is little evidence on whether they truly reduce emissions. We study carbon offsets sold by manufacturing firms in China under the United Nations’ Clean Development Mechanism (CDM). We find that offset-selling firms increase carbon emissions by 49% in the four years after starting an offset project, relative to a matched sample of non-applicants. We explain this increase in emissions by jointly modeling the firm decision to propose an offset project and the UN’s decision of whether to approve. In estimates of our model, CDM firms increase emissions due to both the selection of higher-growth firms into project investment (40 pp of the total) and the causal effect of higher efficiency, post-investment, on firm scale and therefore emissions (9 pp).

Please register for the event to receive email updates and add it to your calendar. Lunch will be provided.

About the Speaker 
 

Daniel Yi Xu is a Professor of Economics at Duke University and a Faculty Research Associate at the National Bureau of Economic Research. His research focuses on the intersection of productivity, international trade, and industrial organization. Professor Xu’s current research agenda involves the use of large-scale microdata to model and estimate a broad range of dynamic individual firm decisions and to examine how these decisions impact resource allocation, industry performance, and economic growth, particularly in developing and emerging economies.

His most recent work has been published in leading economics journals, including the American Economic Review, Journal of Political Economy, Review of Economic Studies, RAND Journal of Economics, Review of Economic Dynamics, and Management Science. Professor Xu is currently a co-editor of the American Economic Journal: Microeconomics and an associate editor of the RAND Journal of Economics. He previously served as co-editor for the Review of Economics and Statistics and the Journal of Development Economics. Additionally, he has been an associate editor for the American Economic Journal: Applied, Economic Journal, Journal of Industrial Economics, Journal of International Economics, Quantitative Economics, and the Review of Economics and Statistics.
 

A NOTE ON LOCATION

Please join us in-person in the Goldman Conference Room located within Encina Hall on the 4th floor of the East wing.

Questions? Contact Xinmin Zhao at xinminzhao@stanford.edu