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Testing the ambition loop: do country- and company-level net-zero targets reinforce each other? A global comparison

Author

Listed:
  • Eskander, Shaikh
  • Higham, Catherine
  • Hamley, Maggie
  • Setzer, Joana
  • Fankhauser, Samuel

Abstract

One theory about company- and country-level climate actions is that they interact with one another through a mutually reinforcing “ambition loop”. Using publicly available data on country- and company-level net-zero targets, our econometric analysis reveals a positive relationship between state and company: a country introducing a domestic net-zero target in law increases the likelihood of companies introducing their own voluntary targets and vice-versa. Our findings offer important insights into the mechanisms of climate governance – knowledge that will be critical if we are to meet global net-zero targets by 2050.

Suggested Citation

  • Eskander, Shaikh & Higham, Catherine & Hamley, Maggie & Setzer, Joana & Fankhauser, Samuel, 2024. "Testing the ambition loop: do country- and company-level net-zero targets reinforce each other? A global comparison," LSE Research Online Documents on Economics 122252, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:122252
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    File URL: https://researchonline.lse.ac.uk/id/eprint/122252/
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    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • P00 - Political Economy and Comparative Economic Systems - - General - - - General
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm

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