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Do carbon abatement opportunities become less profitable over time? A global firm-level perspective using CDP data

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  • Blanco, Christian C.
  • Caro, Felipe
  • Corbett, Charles J.

Abstract

Firms around the world need to find ways to continuously reduce their carbon footprint, preferably in ways that are profitable or cost-effective. The opportunities available to them will change over time, as they implement the most profitable ones first and as technology changes. When designing and adjusting their carbon policies, policy-makers need to understand the abatement opportunities firms are facing. We explore this using data collected by CDP (formerly the Carbon Disclosure Project) on 20,920 carbon abatement projects implemented by more than 1400 firms worldwide over 7 years. Using fixed effects regression with energy price controls by country, our results show that the average payback period of implemented carbon emissions reduction projects remained relatively constant from 2010-2016, although there is tentative evidence that the projects are becoming smaller over time. We provide a novel firm-level perspective on carbon emissions reduction activities using data on projects implemented and reported by large, global firms, and discuss how the insights from such firm-level analysis can help inform the design and revision of carbon emissions policies over time.

Suggested Citation

  • Blanco, Christian C. & Caro, Felipe & Corbett, Charles J., 2020. "Do carbon abatement opportunities become less profitable over time? A global firm-level perspective using CDP data," Energy Policy, Elsevier, vol. 138(C).
    • Handle: RePEc:eee:enepol:v:138:y:2020:i:c:s0301421520300070
    DOI: 10.1016/j.enpol.2020.111252
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