Korean Energy Economic Review ISSN:1599-7057(Print) 에너지경제연구

The Korean government is introducing the emission trading system as a means of achieving the Korea's mid-term Greenhouse Gases emission reduction target. However, it is well known that manufacturing sector in Korea is characterized by the energy intensive structure. Therefore, economic analysis on how carbon dioxide emission reduction might impact on the economy, especially firm's competitiveness, is necessary in the context of preparing for the global environment change. This study amis to analyze the relationship between the costs associated with the Greenhouse Gases and the firm's characteristics, such as productivity and investment. We empirically investigate how firm's investment affects its costs associated with Greenhouse Gases. This study, which is different from previous studies in terms of the estimation approach, applies the quantile regression methods. The estimation results show that in general, the effects of firm's investment and the productivity on the costs associated Greenhouse Gases are positive.