The Impact of Internal Carbon Pricing on Corporate Carbon Performance

Abstract

This study focuses on internal carbon pricing (ICP), a new issue in environmental management accounting, and examines the effect of the introduction of ICP on corporate CO₂ emissions. The analysis confirmed that the introduction of ICP does not necessarily lead to a reduction in CO₂ emissions, but that the introduction of ICP reduces CO₂ emissions by increasing capital expenditures. This result suggests the importance of linking ICP to capital budgeting and investment decision making.