Environmental and natural resource economics
A report by world wildlife fund in association with CDP, a research firm in America has shown that cutting carbon emissions by 3% annually by firms could reap them as much as $190 (Ford 2018). The research goes further to explain that this could be achieved through reducing energy bills, innovation and increased productivity. The easiest method suggested in the report include new and clean energy sources such as solar (Tietenberg and Lewis 2016). With such a reliable information, every firm would be rushing to find ways of closing the gap of carbon in order to reap big in profits. However, with the window of opportunity closing first, some firms have invested in the carbon emissions reduction process while others have not. This form the basis of the question that the research seeks to unlock.
This issue is important to business and firm managers of any companies no matter the size. According to the prediction of scientist, continuous emissions of carbon into the atmosphere make it much harder to achieve the reduction goals. Considering that other companies are investing heavily while other aren’t, it would be a loss for the companies investing into reducing emissions to suffer risk that come by it. These risk of business destructions caused by ignorance in reduction include; extreme weather events such as floods and severe storms (Eikeland and Skjærseth 2016). This makes the research further crucial.
The proposed research will help the theory by climate activists referred to as “gigaton gap”. Gigaton gap is the amount of carbon released in the atmosphere by the corporate sector in relation to the levels of carbon emissions necessary to warm the globe to pre-industrial levels (Charles, Schmidheiny and Watts 2017). The research will therefore develop further this theory by finding out, the reason why some companies would not want to lower the gigaton gap. The research is in other way a development of the gigaton gap theory by the climate and environment activists.
According to environmental scientist, increasing the global average temperature to 2 degrees Celsius is already a path that some companies have taken (Urry 2015). The scientist further warns of further increment that would lead to a final threshold which when crossed, the new situation would be a long term irreversible dangerous effects, even to the company and firms themselves. The research will therefore seek to find out, that even after such warning about devastating effects, why would some companies hold back in the journey to reduce carbon emissions into the atmosphere (Schaltegger and Burritt 2017).
Why the social sciences matter Palgrave Macmillan
According to Farber (2018), most companies do not adopt to policies that lead to lead to reduction in carbon emissions even if others do for the mere reason of losing production ability. After conducting an investigative research, the article without mentioning these firms asserts that most company management are in fear of losing their ability to produce when they employ the new innovative methods. The journal however doesn’t research further to indicate if the companies have tried the method in the past so that they recorded a loss before deciding not to try these measures of prevention of carbon emissions anymore. The latter research will therefore seek to fill this gap by finding out, the tests that the companies need in order to come up with the fear not to prevent carbon emissions to the environment.
A journal by Coulson-Thomas (2017) explains that there is a little twist in why some companies cannot adopt policies that reduce carbon emission. Internally the companies are willing to fence lines that reduce their own emissions. This helps them to become more resilient to inevitable climate impacts. The companies have even showed willingness by understanding the risk and opportunities of a changing climate. The companies however have problems convincing their external partners. These external partners include; suppliers, customers and other key stakeholders. A customer would want the same kind of services and goods they have received for a long time. A change for them and they would drop the product. It is for this reason that some companies are reluctant into adapting to the carbon emission prevention policies. Most companies under these categories according to the journals are the ones that deal with direct clients as their customers. For suppliers it’s easier to talk to the compared to clients. The current research is therefore seeking to determine, if there are measures taken to inform all the stakeholders about these policies before pre-judging about their reactions. It is very likely that if they are told about what waits in the future and with all the climate activism, they would definitely accept these changes. However, the research will go further to find out.
A third journal by Lo et al. 2018) recently conducted an empirical research only to find out that most companies do not adapt to the conventional Paris agreement on climate and carbon emissions. They are not bound by the Paris agreement; they have taken their own measures that only last a few months or years. The latter research therefore seeks to find out how the measures taken by self-companies will lead to the desired climate outcomes. The journal however predicts that, most of these measures will only last up to if furthest 2020 and not 2030 as previously expected. The research therefore seeks to develop further this journal. The journal acknowledges that for company that have opted for low carbon economy it would be great news for them but at the long run, it would be disastrous if they don’t pick up the pace like they are supposed to.
Environmental Incidents and the Market Value of Firms
A fourth journal drags the role of the government into this issue. Citing the case of America under their president Donald Trump pulling out of the Paris agreement, the journal by Robbins (2016) explains that these might also be a possible reason why some companies reduce carbon emissions more than others. According to the article, research showed that withdrawals of US, considering it was the largest emitter made national governments for other countries example France summon top firms and advise them on how to adapt to the carbon emissions issue. The study will therefore seek to find if companies operate independently or the governments might have a say on the policy regarding the carbon emission issue. The study will therefore not only fill the information gap about the government but also find out which way do the companies prefer. Government policies or independent policies.
An additional article, Clémençon (2016), suggests that the major reason why some companies would participate in the prevention of carbon emission than other is the value chain. The article gives example of a super-market whose electricity related emission would be less than 1% of the total carbon emission of a country. But the value chain related to it would be extremely high magnitude. Value chain relatedness involve various reasons mentioned in the article as consumer interest, high and volatile energy prices and even brand. The research will therefore seek to find out what are the roles of firms that have no direct production of carbon emissions but have high related value chain. Consequently, the study should recommend the best way to compare the low carbon remitter and the high carbon remitters in relation to their efforts.
Some firms through their managers have preference in objective measurement. They prefer taking part in activities they can actually create objectives and at the end of it measure achievements against the objectives. This helps in reporting performance. This has led to such companies, preferring to focus on issues that are amiable to quantification. Falkner (2016), explains this logic in his journal. Which he further develops to say that is why some companies ignore the carbon emission policies, considering that it is unquantifiable. They therefore opt to participate in activities of potential that they can exert authority and influence. The study will use these study as a starting point for those rather ignorant firms that think all objectives should be measured. The study will there after propose ways in which carbon emission reductions process can be quantified into result. That way the firms through their managers can no longer have any excuses of not participating in reduction of carbon emissions. The research would then fill the information gap on why the firms would rather survive on excuses and not reality considering the scientific effects that come by carbon emissions.
There is change in the old business paradigm. Companies and organization traditionally held that investing in environmental protection ways would financially run down the counter, a theory that has been proven not true. According to Oberthür and Groen (2017), many firms including poor index firms have shown and reported a higher rate of profit when they invested in carbon reduction emission technologies. This they have even shown more than overall corporate capital established investments. The study will therefore find further empirical truth that disintegrates the old business paradigm. The study would seek to prove that carbon emissions process in fact lead to rise in profits. It is for these reason that companies who have discovered this secret continue to reduce carbon emissions.
It is financial income of a firm that will make it participate in reducing carbon emission than others.
References
Charles Jr, O.H., Schmidheiny, S. and Watts, P., 2017. Walking the talk: The business case for sustainable development. Routledge.
Clémençon, R., 2016. The two sides of the Paris climate agreement: Dismal failure or historic breakthrough?.
Coulson-Thomas, C., 2017. Climate change opportunity and corporate responses.
Eikeland, P.O. and Skjærseth, J.B., 2016. Comparative Analysis. In Corporate Responses to EU Emissions Trading (pp. 271-300). Routledge.
Falkner, R., 2016. The Paris Agreement and the new logic of international climate politics. International Affairs, 92(5), pp.1107-1125.
Farber, D.A., 2018. Going Private: Climate Action by Businesses and Individuals.
Ford, L., 2018. Transnational actors in global environmental politics1. In Global Environmental Politics (pp. 38-56). Routledge.
Lo, C.K., Tang, C.S., Zhou, Y., Yeung, A.C. and Fan, D., 2018. Environmental Incidents and the Market Value of Firms: An Empirical Investigation in the Chinese Context. Manufacturing & Service Operations Management.
Oberthür, S. and Groen, L., 2017. The European Union and the Paris Agreement: leader, mediator, or bystander?. Wiley Interdisciplinary Reviews: Climate Change, 8(1), p.e445.
Robbins, A., 2016. How to understand the results of the climate change summit: Conference of Parties21 (COP21) Paris 2015.
Schaltegger, S. and Burritt, R., 2017. Contemporary environmental accounting: issues, concepts and practice. Routledge.
Tietenberg, T.H. and Lewis, L., 2016. Environmental and natural resource economics. Routledge.
Urry, J., 2015. Climate change and society. In Why the social sciences matter (pp. 45-59). Palgrave Macmillan, London.
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