Abstract: Did firms shift resources to decarbonization in the wake of the 2015 Paris Agreement on climate change, especially in industries where technology permits relatively cheap low- carbon options? The Paris Agreement marked a key moment in climate cooperation, uniting countries towards a common goal of limiting global temperature increase to well below 2 degrees. However, achieving this target is largely dependent on the behavior of corporate actors given that companies have been responsible for the lion’s share of greenhouse gas emissions. In this paper, we examine whether the Paris Agreement changed corporate behavior among “convertible” industries, focusing on automobile manufacturers. Political science literature points to two very different viewpoints on this question. Using five types of primary source materials such as earnings call transcripts and production reports, we find quite limited evidence that the Paris Agreement shifted business strategy in the car sector. Overall, the evidence should lead dispassionate analysts to revise downward their beliefs about Paris impact. Still, the Paris Agreement might have created an enabling environment for more ambitious domestic policy in the long run.
Moderator: Maggie Peters