The impact of corporate governance on carbon emissions
This research programme will empirically examine how ownership form, through its effect on corporate governance, affects firm carbon dioxide (CO2) emissions abatement activities using Swedish data from 1990-2018 as our experimental setting.
Funded by: Swedish Research Council (Vetenskapsrådet)
Time period: 2021-2023
Project members: KTH and Stockholm School of Economics
Project contact persons:
Background:
Our goal is to empirically test how carbon pricing impacts CO2 emissions abatement in companies with different governance mechanisms. To that end we combine unique registry data, several measures of CO2 abatement and emissions at the level of individual establishments, combined with rich information on firm financials, ownership structures, individual employee characteristics (positions, skills, and wages), patenting activity, and unique vehicle data. Second, the fact that Sweden has been in the forefront of climate policy, having undertaken several interesting policy measures to incentivize firms to reduce CO2 emissions, including the introduction of a carbon tax in 1991 (currently the highest in the World). From 2005, the most emitting plants have been phased in to the European Union emission trading system (EU ETS). Sweden has also introduced various policy measures aimed at road transport (incentives for environmentally friendly cars, environmental zones and changes in taxes of gasoline).Third, Sweden represents one of Europe’s most active markets or corporate control, including privatizations, private equity transactions, and mergers and acquisitions (M&A) activity, which enables us to study the effect of ownership transitions.