Does the EU Carbon Border Adjustment Mechanism (CBAM) Affect Korean Firms' Stock Prices?
Chung-Won Woo (Changwon National University) & Yong-Hyun Kwon (Chungbuk National University) Review of Accounting and Policy Studies, 29(4), 131–169, 2024 · DOI: 10.21737/RAPS.2024.11.29.4.131
TL;DR — First event study of the EU CBAM's impact on Korean firm value. Around the December 13, 2022 final CBAM agreement, Korean listed firms with higher carbon risk — larger greenhouse-gas emissions, energy consumption, and certified emissions — experienced significantly more negative abnormal returns (CARs/BHARs). The market priced CBAM in over the medium to long term, not as a one-day shock.
Key findings
1. Carbon risk predicted value loss. The higher a firm's carbon risk (GHG emissions, energy consumption, certified emissions), the more negative its stock price reaction to the CBAM announcement.
2. The effect was medium-to-long-term. Cross-border environmental regulation was absorbed gradually by the Korean stock market — evidence that investors treat CBAM as a structural cost, not transient news.
3. Policy implication. Carbon exposure is now a valuation issue, not only a compliance issue. Policymakers should prepare support measures for carbon-intensive export manufacturers ahead of stricter cross-border regimes.
Method in one line
Event study (Cumulative Abnormal Returns and Buy-and-Hold Abnormal Returns) around the final EU CBAM agreement of December 13, 2022, followed by cross-sectional regressions of abnormal returns on firm-level carbon-risk measures.
국문 요약
EU 탄소국경조정제도(CBAM) 최종안 합의(2022.12.13)에 대한 한국 상장기업의 주가 반응을 분석한 최초의 이벤트스터디. 온실가스 배출량·에너지 사용량·배출권 보유량이 큰 탄소위험 상위 기업일수록 기업가치 하락이 유의하게 컸으며, 그 영향은 단기 충격이 아니라 중장기에 걸쳐 주가에 반영되었다. 탄소배출 정보는 이제 환경 이슈가 아니라 기업가치 이슈라는 실증 근거.
FAQ
Q. Which sectors are most affected? Carbon-intensive export manufacturing — steel, machinery, and other CBAM-covered industries central to Korea's export economy.
Q. What data measure "carbon risk"? Firm-level greenhouse-gas emissions, energy consumption, and certified emissions of Korean listed firms.
APA: Woo, C.-W., & Kwon, Y.-H. (2024). An empirical study on the impact of the European Carbon Border Adjustment Mechanism on Korean listed firms. Review of Accounting and Policy Studies, 29(4), 131–169. https://doi.org/10.21737/RAPS.2024.11.29.4.131
BibTeX:
@article{woo2024cbam,
title={An Empirical Study on the Impact of the European Carbon Border Adjustment Mechanism on Korean Listed Firms},
author={Woo, Chung-Won and Kwon, Yong-Hyun},
journal={Review of Accounting and Policy Studies},
volume={29}, number={4}, pages={131--169}, year={2024},
doi={10.21737/RAPS.2024.11.29.4.131}}