Shadows disappear at night: climate change and climate-related corporate disclosure in an agent-based IAM

Martedì, 15 dicembre 2020, ore 14.15

Autore:  Alessandro Sapio (Università di Napoli Parthenope) with Lilit Popoyan

In this paper, we extend the DSK agent-based integrated assessment model (Lamperti et al. 2018, Ecological Economics) to study the potential effects of climate-related corporate disclosure on global temperatures and the economy. Non-financial reporting requirements are increasingly adopted worldwide, mandating (large) companies to publish reports on the social and environmental impacts of their activities. One major example is the non-financial reporting directive (NFRD) of the European Commission (Directive 2014/95/EU). Such requirements are hoped to foster efforts to reduce the climate impact of business activities, but may result in mere "green-washing". 
In the model, we assume that companies are required to periodically submit a report on their CO2 emissions and "green" R&D expenses to a regulatory authority. Whenever a company fails to comply with regulatory targets, it is fined. Companies can adapt in various ways, e.g. by accelerating their adoption of "green" machinery, but in case they are unable to cope within a given time window, their operating license is revoked. We test alternative regimes, in which only capital good firms or also consumption good firms are subject to the requirements, and experiment with different parameter values.
The simulation results are validated through econometric methods, against an array of macro- and micro-economic stylized facts. 

[Ultimo aggiornamento: 16/12/2020 08:20:17]