Keep calm and carry on emitting: cap-and-trade rules, local emissions and growth

We estimate the impact of Cap-and-Trade Program (CATP) in California on regional greenhouse gas emissions and economic growth. Our preferred identification strategies, based spatial distance county-level contiguity, fail to provide evidence a reduction or growth due CATP. Multi-state organisations do not transfer non-Californian facilities, but parent-level concentration changes, consistent with an insofar unexplored form regulatory arbitrage. Overall, our results highlight importance approach when designing climate policies evaluating their effects.