Early Action in GHG Mitigation and Role of Information Disclosure - - PowerPoint PPT Presentation
Incentives for Voluntary Early Action in GHG Mitigation and Role of Information Disclosure Mechanisms Donna Ramirez Harrington Department of Economics University of Vermont Economics and the Environment Strengthen and harness market
Donna Ramirez Harrington Department of Economics University of Vermont
Strengthen and harness market Quality of information matters Complement to regulation
Widespread use started in 1990s for chemical releases Adopted in US and Canada and many developing countries Regulatory pre-emption Regulatory relief Market reputation – consumers, stockholders Public recognition - lobby groups, local community Technical assistance and learning Flexibility Cost-effectiveness
US DOE Climate Wise Program (1994-2001) Canadian Voluntary Climate Registry (VCR) (1994-2003) What are motives for reporting? Do reporters have lower GHG levels and higher
innovation activity?
US Climate Wise
To signal environmental
responsibility to the regulator and the public
High technical capacity
(R&D and technical assistance)
Profitable, less financially
risky
http://www.sciencedirect.com/science/article/pii/S09287655 12000747
Canadian VCR
To signal environmental
responsibility to regulators, investors and the public
High technical capacity
(experience in unilateral actions)
http://link.springer.com/article/10.1007%2Fs10640-010-9391-4
US Climate Wise
Promote innovative
activity (environmental patents) but only among relatively low R&D firms
Canadian VCR
Reporters did not have
lower GHG than non- reporters
Issues:
EPA GHG Reporting Program (2011- )
http://www.epa.gov/ghgreporting/
Canadian Mandatory
Greenhouse Gas Reporting System (2004- ) http://www.ec.gc.ca/ges-ghg/default.asp?lang=En&n=040E378D-1
Negative abnormal stock market returns among reporters Absolute performance does not matter Relative performance matters: Negative abnormal returns
higher for worse-performing firms
Ranking in terms of GHG levels got worse relative to other
reporters
Voluntary reporting prior to mandatory reporting offsets some
Negative abnormal returns do not persist
Old vs new news Changes in regulatory framework
Research: Are biggest stock market losers reducing GHG
levels (more)?
Policy: How to design GHG reporting systems
Quality of information and ease of use Credibility of information
Policy: How to design national GHG reporting systems
Cap and trade system requires credible and systematic reporting
Policy: Disclosure policies for green
power
Supply-side Public Service Board to prescribe
standards for electricity suppliers to disclose information
environmental impacts of electricity generation to retail customers on an annual or less frequent basis.
Policy: Reporting systems as behavioral
intervention for consumers’ energy use
Demand-side Personalized energy use feedback and
social comparison
Mailed regularly Short-term reduction unless there is
repeated notices
Hunt Allcott and Todd Rogers "The Short-Run and Long-Run Effects of Behavioral Interventions: Experimental Evidence from Energy Conservation," October 2014 American Economic Review (104:10,
Policy: Reporting systems for heating and
transportation
Published
EMS and the VCR: The role of environmental management systems in the Canadian Voluntary Climate and Challenge Registry, Journal of Environmental Planning and Management, 57(8), 2014. http://www.tandfonline.com/doi/abs/10.1080/09640568.2013.787055
Innovation under the Climate Wise Program, Forthcoming at Resource and Energy Economics May 2013, 35(2) : 91– 112 (with K Brouhle and B. Graham) http://www.sciencedirect.com/science/article/pii/S0928765512000747
GHG Registries: Participation and Performance under the Canadian Voluntary Climate Challenge Program, Environmental and Resource Economics, December 2010 47(4): 521-548 (with K. Brouhle). http://link.springer.com/article/10.1007%2Fs10640-010-9391-4
Firm Strategy and the Canadian Voluntary Climate Challenge and Registry (VCR), Business Strategy and the Environment, 2009, 18, 360-379 (with K. Brouhle). http://onlinelibrary.wiley.com/doi/10.1002/bse.604/abstract In progress: The Canadian Mandatory Greenhouse Gas Reporting System: Information Disclosure, Capital Markets, and Climate Change Mitigation (with K. Brouhle) Patent Citations and Network Effects from Climate Wise Program (with B. Graham and K. Brouhle)
1.
Innovation under the Climate Wise Program, Resource and Energy Economics May 2013, 35(2) : 91–112 (with K Brouhle and B. Graham)
2.
Patent Citations and Network Effects from Climate Wise Program (with B. Graham and K. Brouhle), In progress These papers deal with the Climate Wise Program and patenting behavior. The Climate Wise program was one of the largest voluntary programs in the US geared toward climate change
Unlike existing literature on Climate Wise, these two papers are concerned with the impact of the program on knowledge acquisition and transmission, rather than on measure of pollution directly. This is an important contribution because knowledge acquisition and transmission may not yield immediate environmental benefits such as reduced greenhouse gas emissions and energy cost savings but they may be important in building knowledge stock to achieve long-term emission reduction goals especially for the case of greenhouse gases for which the future form of future regulatory intervention is still uncertain.
1.
EMS and the VCR: The role of environmental management systems in the Canadian Voluntary Climate and Challenge Registry, Journal of Environmental Planning and Management, 57(8), 2014.
2.
GHG Registries: Participation and Performance under the Canadian Voluntary Climate Challenge Program, Environmental and Resource Economics, December 2010, 47(4) : 521-548 (with K. Brouhle).
3.
The Canadian Mandatory Greenhouse Gas Reporting System: Information Disclosure, Capital Markets, and Climate Change Mitigation (with K. Brouhle), In progress These papers examine the Voluntary Climate and Challenge Registry (VCR) in Canada which specifically prescribes the adoption of environmental management practices that would determine the quality of its action plan. The first paper shows that adoption of EMS prescribed by the VCR is more likely among facilities which have experience with implementing other management systems, such as ISO 14001, and among facilities in provinces with higher levels of legal and institutional support for EMSs but less reliance on the primary sector. The second and third focus on the information disclosure component of the VCR. The second paper focuses on the quality of publicly-available information that is related to the degree of involvement in the VCR. The findings show that firms which voluntarily disclose information about their climate mitigating activities tend to be the ones who are very visible: they are large (visible to the public), publicly traded (sensitive to stockholders) and high polluters (responsive to regulators), highlighting the value of VCR as an information disclosure
the program, which may suggest some form of strategic greenwashing behavior. After the VCR program ended in 2004, the government of Canada legislated mandatory reporting of greenhouse gases by individual polluting entities in specific sectors. Thus, the third paper is an ongoing work which examines whether and how much mandatory information disclosure related to climate mitigating activities influences stock market returns of publicly traded firms and whether these firms reduce greenhouse gases in response to negative stock market returns.