Grand Challenges and Local Beliefs: How Belief in Climate Change Relates to Greenhouse Gas Emissions in U.S. Manufacturing Facilities

Speaker: Thomas P. Lyon, Dow Chair of Sustainable Science, Technology and Policy Ross School of Business School of Environment and Sustainability, University of Michigan

Abstract: Greenhouse gas emissions are the leading cause of climate change: however, unfortunately not everyone is completely convinced of this fact. This study provides the first empirical evidence on whether that degree of (dis)belief is associated with changes in firms’ behaviours. The analysis combines data from the EPA’s Greenhouse Gas Reporting Program (GHGRP) with a survey that assesses climate change belief at the county level in the United States. It emerges that facilities located in counties with stronger climate change beliefs demonstrate greater reductions in greenhouse gas emissions over time, and that this effect is amplified when their headquarters are also in counties with high belief in climate change. Moreover, the effect is substantial: by the end of the sample period, a facility in an area where only 33% of residents express climate concerns would emit 29% more greenhouse gases than a facility in an area where 69% of residents express concern. The results of this study speak to the literature on environmental performance and to strategy research on the role of community norms in influencing firm behaviour and knowledge transfer.

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