In response to national commitments to lower carbon emissions and to government-mandated firm-specific emissions reduction targets using an emission cap-and-trade system, affected firms are subjected to an added marginal cost related to carbon emissions. Assuming that affected firms are profit seeking, they must alter their business strategies and investment plans to accommodate this new cost. To examine how businesses change strategies in the face of a new marginal cost, I look at the choices made by Swedish electricity-producing firms in the face of the European Union’s Emissions Trading Scheme. Through regressions of each firm’s profit, I discover that the investing in renewable energies will be the most profitable strategy in the long run.
There has been a significant examination of debt levels and their impact on economic growth. With the successful reduction of debt in Canada in the 1990s and Greece experiencing crippling debt levels in the 2010s, debt still plays a major role when nations enact financial policies. In this study, I examine the relationship between debt and economic growth by answering two questions; 1. Does high debt impact economic growth? 2. Does austerity really promote growth? By examining panel data from 34 OECD countries over 65 years, I find that high debt does, in fact, reduce economic growth. However, reducing the government deficit levels doesn’t result in larger growth. Overall, it seems that efforts to reduce debt levels will promote growth, but reducing deficit levels isn’t the best tool to do so.