Climate policy uncertainty and firm‐level carbon dioxide emissions: Assessing the impact in the U.S. market

Djula Borozan; Burak Pirgaip

doi:10.1002/bse.3784

journal article Open Access May 06, 2024

Climate policy uncertainty and firm‐level carbon dioxide emissions: Assessing the impact in the U.S. market

Djula Borozan Burak Pirgaip

Business Strategy and the Environment Vol. 33 No. 6 pp. 5920-5938 · Wiley

View at Publisher Save 10.1002/bse.3784

Abstract

AbstractThis paper examines the impact of climate policy uncertainty (CPU) on carbon dioxide (CO2) emissions of 1007 listed firms over 2003–2021. As the urgency to combat climate change and implement effective policies may create uncertainty, it focuses on the Unites States, a significant emitter with a complex policy landscape. Using the two‐step system generalized method of moments estimation, the analysis reveals a negative CPU–CO2 emissions relationship, indicating that increased CPU incentivizes firms to adopt sustainable practices, leading to emissions reductions. Capital expenditures have similar effects on emissions, accompanied by increased corporate sustainability engagement. However, no significant relationship is found between research and development (R&D) expenditure and CO2 emissions, nor does CPU significantly moderate the R&D–CO2 emissions nexus. Firms with substantial fixed assets exhibit higher CO2 emissions, while heavy emitters demonstrate limited CPU responsiveness. These findings provide valuable insights for policymakers encouraging corporate participation in emissions reduction efforts.

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Citations

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References

Details

Published: May 06, 2024
Vol/Issue: 33(6)
Pages: 5920-5938
License: View

Authors

D

Djula Borozan

Faculty of Economics in Osijek Josip Juraj Strossmayer University of Osijek Osijek Croatia

B

Burak Pirgaip

Department of Business Administration Hacettepe University Ankara Turkey

Cite This Article

Djula Borozan, Burak Pirgaip (2024). Climate policy uncertainty and firm‐level carbon dioxide emissions: Assessing the impact in the U.S. market. Business Strategy and the Environment, 33(6), 5920-5938. https://doi.org/10.1002/bse.3784

Climate policy uncertainty and firm‐level carbon dioxide emissions: Assessing the impact in the U.S. market

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