Corporate Decarbonization Initiatives Matter Less Than State Climate Policies

Companies and subnational governments are actively attempting to fill the greenhouse gas (GHG) mitigation gap left by weak national policy, but how effective are their efforts in reducing GHG emissions? This is the first study to disaggregate corporate GHG reporting from CDP (formerly Carbon Disclosure Project), down to the facility level to analyze the respective roles of corporate initiatives and subnational public policies in driving corporate decarbonization in the United States from 2010 to 2019. We find that although corporate decarbonization initiatives are associated with GHG reductions, the primary drivers of corporate facility decarbonization are state-level climate policies, in particular financial incentives for energy efficiency. This suggests that the new wave of similar incentives provided by the recent Inflation Reduction Act are likely to be effective for driving decarbonization across corporate America. Since the total emissions by CDP-disclosing corporations increased substantially over our sample period, full utilization of new incentives and broad expansion of both subnational climate action and corporate initiatives may be vital to reduce overall U.S. corporate emissions.