Grand Challenges and Local Beliefs: How Belief in Climate Change Relates to Greenhouse Gas Emissions in United States Manufacturing Facilities
Abstract
There remains significant disparity in the degree to which people agree with the scientific evidence that greenhouse gas emissions are the leading cause of climate change. We provide the first empirical evidence on whether that degree of belief is associated with changes in firms’ behaviors. We combine data from the EPA’s Greenhouse Gas Reporting Program (GHGRP) with a survey that assesses climate change belief at the county level in the United States. For each facility, we include data on beliefs at the local level as well as at corporate headquarters. In order to control for changes in facility-specific production levels over time, we link our data to the EPA’s Toxic Release Inventory, which reports facility-level data on production ratios from year to year. We also include demographic data on racial makeup and political and religious affiliations at the local level; state and local climate policies; and the presence of environmental activists in the local area. We find that facilities located in counties with stronger climate change beliefs demonstrate greater reductions in greenhouse gas emissions over time. Moreover, the effect is substantial: by the end of our sample period, a facility in an area where only 33% of residents express climate concerns would emit 29% more greenhouse gases than a comparable facility in an area where 69% of residents express concern.The effect of local beliefs is stronger for facilities located a greater distance from corporate headquarters. In addition, facilities whose headquarters are located in areas with strong climate beliefs show greater sensitivity to local beliefs, as do facilities whose parent company is an EPA Climate Leader. Our results speak to the literature on environmental performance and to research on the role of community norms in influencing firm behavior and knowledge transfer.