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Conference Agenda

Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available).

Please note that all times are shown in the time zone of the conference. The current conference time is: 10th Sept 2026, 07:07:14pm CEST (Norway)

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Daily Overview

Session

Egg-timer session: Carbon emission trading
Location: Auditorium J: Aina Uhde
Session Chair: Corrado Di Maria, University of East Anglia

Presentation 4

The Hidden Costs of Carbon Pricing: Exploring the EU ETS’s Impact on Start-up Investments

Ulrike Morgalla¹, Antoine Dechezleprêtre², Benedict Probst¹

1: Max-Planck-Institute for Innovation and Competition, Germany; 2: OECD Directorate for Science, Technology and Innovation

This paper investigates the impact of the EU Emissions Trading System (EU ETS) on regulated firms' investments into start-ups. The existing research primarily addresses the direct inventive responses of regulated firms, potentially overlooking spillover effects towards start-ups and SMEs. We hypothesise that the EU ETS does not only affect regulated firms' innovation efforts but also impacts their investments in green start-ups. To test this, we employ a Difference-in-Differences identification strategy, leveraging the allocation of free allowances within the EU ETS and the transition from Phase 3 to Phase 4 in 2021, which was marked by a significant increase in the carbon price. Unlike most prior studies that focus on the system’s introduction, this analysis evaluates the marginal impact of price hikes on regulated firms fully exposed to the price shock compared to regulated firms with limited exposure to the price shock. We find that the price increase is associated with a 3.58 percentage point decrease in the share of regulated firms' investments in green start-ups representing a 62% decline relative to the pre-treatment year. This effect appears to be primarily driven by a reduction in the share of green Seed and Series A investments. In addition, we consistently observe a real reduction in the share of green investment volumes. Notably, we find no significant effect on acquisitions.