Transparency in Climate Politics: Evidence from China, Europe, and the US

Session Submission Type: Full Paper Panel

Session Description

Firms and industry groups in polluting sectors (e.g., petroleum, mining, manufacturing) have historically obstructed effective climate policies through lobbying, the spread of misinformation, and selective compliance. Policies that call for increased transparency into industry activities are particularly met with resistance. In the absence of reliable information about environmental outcomes and indicators -- whether disclosed voluntarily or by mandate -- firms can hide non-compliance with environmental regulations. Yet, the extent to which a push towards more transparency can help facilitate more effective climate policy is unclear.

All five papers in this panel explore the role of transparency in the effectiveness of either enacting, implementing, or enforcing climate policies. The first two papers look at determinants of support for transparent firm behavior. Using the case of the European Emissions Trading System, Toenshoff examines why some firms choose to lobby openly for or against climate policy while others choose to “hide” behind industry associations that lobby on their behalf. Jensen explores similar themes in the context of proposed US Securities and Exchange Commission (SEC) rules on mandatory climate disclosure, showing considerable differences across firms and interest groups that support or oppose greater transparency.

The next two papers examine factors that drive firms to voluntarily disclose information about environmental impacts. Bayer and Bunte analyze how firms use voluntary disclosure of GHG emissions to signal their vulnerability to climate regulations and thereby receive regulatory compensation (e.g. state-backed loans, exemptions) from government. Lomov and Mahdavi characterize disclosure as a time inconsistency problem: absent transparency requirements, stakeholder time horizons determine whether major polluters reveal or withhold information about future climate risks.

Finally, Anderson, Buntaine, Liu and Zhang assess the effectiveness of transparency regulations. They deploy an impressive nationwide field experiment on municipal governments in China to find that transparency noticeably reduces air pollution.

Collectively, these papers further our understanding of the dynamics between governments, firms, and broader stakeholders in shaping climate policies and complying with environmental regulations. By analyzing the political factors that drive resistance to or compliance with disclosure of climate-related information, the papers in this panel aim to address the Division’s thematic call to investigate “the impact of (mis)information on policy actors’ beliefs and policy designs.”

Sub Unit

• Division 39: Science, Technology, and Environmental Politics

Chair

• Patrick Bayer University of Glasgow

Discussants

• Jessica Green University of Toronto

• Paasha Mahdavi University of California, Santa Barbara

Individual Presentations

• Hiding in the Crowd: Climate Lobbying under Consumer and Investor Scrutiny - Christina Luise Toenshoff, Leiden University

• Emissions, Carbon Disclosure, and the US EXIM Bank - Patrick Bayer, University of Glasgow; Jonas Bunte, Vienna University of Economics and Business

• The Time Inconsistency Trap of Climate Disclosure in the Fossil Fuel Industry - Denis Lomov, University of California, Santa Barbara; Paasha Mahdavi, University of California, Santa Barbara

• Transparency by Chinese Cities Improves Air Quality and Environmental Governance - Sarah Anderson, University of California, Santa Barbara; Mark Buntaine, University of California, Santa Barbara; Mengdi Liu; Bing Zhang, Nanjing Universiyt