Abstract
The Paris Agreement requires countries to propose their National Determined Contributions (NDCs) and encourages companies to engage in climate action. This two-stage study explores the mutual influence of national and corporate carbon reduction targets and their effect on the adoption of renewable energy using Hierarchical Linear Modeling (HLM). The subjects are companies nested in the G20, engaging in the Science-Based Target initiative (SBTi) or the RE100 initiative. These empirical results show corporate targets are positively correlated to adoption of renewable energy, and development of renewable energy varies by country groups, however; national targets are insignificantly correlated. Our key findings: (1) companies which set SBTs are more willing to use renewable energy to achieve their targets but prefer power purchase agreements (PPAs) and renewable energy certificates (RECs) to investment in renewables. (2) The effect of a national-level target on corporate renewable energy use is non-significant, probably because most multinational corporations are used to compliance and their performances are likely to be better than the national deployment on climate change. We argue that an industrial energy transition to renewables is economically beneficial and needs substantial support in the form of policies or subsidies, instead of just setting targets or attracting publicity.
Highlights
Climate change has become one of the most crucial issues affecting human survival and has resulted in action to prevent a major crisis, including mitigation and adaption
The results show national level variable National Determined Contributions (NDCs) has no significant influence on the corporate adoption of renewable energy in the analysis, probably because of the limitation of the samples, since most companies committed to carbon reduction are mainly composed of multinational corporations, and they conventionally follow the international consensus in terms of compliance
This study combines the company data of the Science-Based Target initiative (SBTi) with the member information of the RE100 and focuses on the companies in G20 to explore the correlation among the NDC, science-based targets, target stringency and the decision to adopt renewable energy
Summary
Climate change has become one of the most crucial issues affecting human survival and has resulted in action to prevent a major crisis, including mitigation and adaption. The goal of overcoming the global challenges posed by climate change will remain elusive through the endeavors of a single country or area and is feasible only through worldwide collaboration. To this end, reliance has to be placed on an effective global governance mechanism [1], under which governments, companies and the public are encouraged to actively take measures to reduce carbon emissions, for example through investment and the adoption of renewable energy. In order to resolve the above-mentioned predicaments, the concept and framework of global governance has gradually been revived in recent years
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