Privatizing Climate Change Policy: is there a public benefit?
The Chicago Climate Exchange (CCX) and the Carbon Disclosure Project (CDP) are two private voluntary initiatives aimed at reducing carbon emissions and improving carbon management by firms. I sample power plants from firms participating in each of these programs, and match these to plants belonging to non-participating firms, to control for differences between participating and non-participating plants. Using a difference-in-differences model to control for unobservable differences between participants and non-participants, and to control for the trajectory of emissions prior to program participation, I find that CCX participation is associated with a decrease in total carbon dioxide emissions for participating plants, but not carbon dioxide intensity. The CDP is associated with a decrease in carbon dioxide intensity, but not total carbon dioxide emissions.