Determinants and Consequences of Corporate Greenhouse Gas Reporting

Unofficial AI-generated summary based on the public title and abstract. Not an official translation.

🔬研究者:Provides a multi-paper framework for studying corporate GHG reporting, including data quality and regulatory impacts.

🏢実務担当者:Highlights the importance of data quality and the potential effects of mandatory reporting on emission reductions.

🏛政策担当者:Offers evidence on how mandatory reporting regulations can influence corporate emissions and the need for robust data infrastructure.

The need to urgently address climate change has become imperative due to its multifaceted impact on economies, politics, and societies. Economically, the increasing frequency and intensity of extreme weather events linked to climate change poses significant risks to infrastructure, agriculture, and insurance markets, leading to substantial economic losses and hindering sustainable development efforts. Indeed, the global economy is already committed to a 19% reduction in income over the next 26 years, regardless of future carbon emissions (Kotz et al., 2024). This level of income loss already exceeds the cost of mitigation. In the past, economists have also argued that a 3 °C target for global warming is optimal, from a costbenefit analysis point of view. This evaluation may have underestimated the probability and potentially catastrophic outcome of climate tipping points, which are much closer than previously assumed and could already be crossed at an increase of 1-2 °C global warming (Lenton et al., 2019). Moreover, current policies are estimated to limit global warming to between 2.2 and 3.4 °C by the year 2100 (Climate Action Tracker, 2023) and many countries are not on a path which will realistically reach net zero by 2050 (European Environment Agency, 2019). However, the transition to a low-carbon economy also presents substantial economic opportunities in renewable energy, clean technologies, and green infrastructure, with the potential for job creation and innovation. Seventy-two countries have analyzed and highlighted these potentials, with regards to their unique economies, in Long Term Low Emission Development Strategies (LT LEDS) submitted to the United Nations Framework Convention on Climate Change (UNFCCC, 2024). Politically, climate change can exacerbate existing tensions and conflicts over scarce resources, migration, and geopolitical competition, potentially destabilizing regions and increasing social inequalities. In the mid-term, the impacts of climate change are projected to intensify, with rising sea levels, disruption to global supply chains, and increased pressure on food and water security, posing significant challenges to global stability and prosperity. Therefore, urgent action to mitigate greenhouse gas (GHG) emissions, enhance resilience, and promote sustainable development is essential if we are to avoid the worst impacts of climate change. Research into climate change policy and the significant role that private companies are playing, with regards to carbon emissions, is crucial for informing effective mitigation and adaptation strategies that can address the challenges posed by global warming. Investigations into policy 2 instruments, such as emission trading systems and mandates to report emissions, provide valuable insights into their efficacy, feasibility, and potential impacts on various stakeholders. By examining the design, implementation, and outcomes of these policies, researchers can identify best practices, assess their effectiveness in reducing GHG emissions, and evaluate their economic, social, and environmental implications. Furthermore, research helps to identify barriers to policy adoption and implementation, as well as opportunities for enhancing policy coherence, coordination, and effectiveness across different levels of governance. Additionally, research contributes to the development of innovative policy solutions, such as carbon pricing mechanisms, renewable energy incentives, and climate finance instruments, which can promote the transformation towards a low-carbon future. Therefore, this dissertation demonstrates in four separate papers key aspects and challenges of corporate GHG emission reporting and the connected data quality issues, the methodological implications on established econometric analyses of filling data gaps through estimations, the consequences of introducing a mandatory reporting regulation on a firm’s emissions and the multi-faceted determinants that influence managers’ decisions to invest in GHG reduction.