The paper is co-authored by Francesco Vona and Giovanni Marin.

The seminar is based on a paper that evaluates the historical influence of energy prices on a series of measures of environmental and economic performance for a panel of French manufacturing establishments during the period 1997-2010. The focus on energy prices is motivated by two facts: i) energy prices are expected to increase reflecting carbon pricing policies required to comply with the Paris agreement; ii) the effects of past environmental policies have been dominated by substantial reductions in quantity-discounts for large consumers, making exceedingly difficult to evaluate each policy in isolation. For identification of the price effects, we construct a shift-share instrument that only captures the exogenous variation of establishment-specific energy prices. Our results highlight a trade-off between environmental and economic goals: while a 10% increase in energy prices brings to a 6% reduction in energy consumption and to a 11% reduction in CO2 emissions, it also has a small negative impact on employment (-2.6%), wages (-0.4%) and firm's productivity (-1%). The negative employment effects are highly heterogeneous across sectors, being, as expected, mostly concentrated in energy-intensive and trade-exposed sectors. Finally, the employment effects are mitigated in multi-plant firms by labor reallocation across establishments.