Strategic environmental disclosure: Evidence from the DOE's voluntary greenhouse gas registry

• Published in: Journal of environmental economics and management Vol. 61; no. 3; pp. 311 - 326
• Main Authors: Kim, Eun-Hee, Lyon, Thomas P.
• Format: Journal Article
• Language: English
• Published: New York Elsevier Inc 01-05-2011; Elsevier; Elsevier Science Publishing Company, Inc
• Series: Journal of Environmental Economics and Management
• Subjects: Air pollution; Business accounting; Business strategies; Carbon; Carbon emissions; Early reduction credits; Economic incentives; Economic models; Economics; Electric utilities; Emissions control; Energy policy; Environmental quality; Environmental regulations; Governments; Greenhouse effect; Greenhouse gas; Greenhouse gases; Greenwash; Information disclosure; Information disclosure Public voluntary programs Early reduction credits Greenhouse gas Electric utilities Greenwash The 1605(b) program; Information dissemination; Probability; Public voluntary programs; Reduction; Regulation; Studies; Sustainability reporting; The 1605(b) program; U.S.A; United States > US; Public voluntary programs; Early reduction credits; Information disclosure; Greenhouse gas; Greenwash; Electric utilities; The 1605(b) program
• ISSN: 0095-0696; 1096-0449
• DOI: 10.1016/j.jeem.2010.11.001

Although mandatory disclosure programs have been studied extensively, strategic voluntary environmental disclosures by firms are not well understood. We study the motivations for and impacts of firms' strategic disclosure of greenhouse gas reductions to the US government. We first model firms' joint abatement and disclosure decisions, incorporating both economic and political incentives. We then use data from the Department of Energy's Voluntary Greenhouse Gas Registry to compare reported reductions to actual emissions. We find that participants in the program engage in highly selective reporting: in the aggregate, they increase emissions over time but report reductions. In contrast, non-participants decrease emissions over time. Participants tend to be large firms facing strong regulatory pressure; pressure from environmental groups reduces the likelihood of participation, suggesting such groups viewed the program as a form of greenwash. Participating in the 1605(b) program had no significant effect on a firm's changes in carbon intensity over time.