I examine whether mandatory reporting might be an effective mechanism for curbing firms’ greenhouse gas emissions. Benchmarking against facilities that previously report emissions, and estimating unobservable pre-reporting emissions by exploiting physical relations underlying fossil combustion, I document an emissions reduction following reporting. This reduction occurs despite increased production, implying emissions-efficiency improvements through either operational changes or adoption of different fuel combustion technologies. The reduction is larger for private-company-owned facilities than for public-company-owned facilities. The emissions distribution also tightens following reporting. These findings are consistent with emissions reductions being driven by concerns about influencing regulation, and the opportunity for across-facility benchmarking. Lastly, facilities appear to engage in reporting avoidance behavior by reporting emissions just below a cease-reporting threshold, though I find no evidence of under-reporting.
Past Faculty Workshop•Nov 22, 2016
Sorabh Tomar, UChicago
Firm Responses to Mandatory Greenhouse Gas Disclosure