The Business of Ecologically Unequal Exchange: A Multi-level Analysis of Corporate Emissions

• In Event: Environmental Sociology Section Roundtables
  In Refereed Roundtable (60 minute): Table 5: Political Economy, Capitalism, and Markets

Abstract

Ecologically unequal exchange (EUE) theory argues that national environmental outcomes are shaped by the structural inequality of international trade, which allows developed, Global North nations to disproportionally benefit from resources and sink capacity of Global South nations, aggravating CO2 emissions and other forms of environmental degradation in the latter. One proposed mechanism for facilitating the emissions displacement from Global North to Global South nations are regulations and policies enacted by Southern nations to encourage business development via a “good business climate.” While these policies encourage multinational corporations to do business in Southern nations, the business that is “done” in these nations is typically the most resource- and emissions-intensive part of the multinationals’ operations. However, whether and how this macro-level, transnational dynamic shapes corporate environmental outcomes remain understudied. To address this gap, we investigate whether the EUE processes affect corporate CO2 emissions, focusing on large, multinational corporations headquartered in the Global North. We hypothesize that Global North nations’ greater involvement in the EUE processes--operationalized as higher percentages of imports from the Global South--are associated with decreased corporate emissions in Global North nations. Findings from multi-level longitudinal regression analysis suggest that this is true of scope 2 emissions (indirect emissions from corporate energy consumption). Further, we find that this relationship is sector dependent: EUE is associated with decreased scope 1 (direct emissions) and scope 2 emissions for corporations in the pharmaceuticals, agriculture, and materials sectors, but increased emissions in the energy sector. These results suggest that corporations in Global North nations are both contributing to and benefitting from ecologically inequitable trade relations with the Global South.

Authors

• Annika Rieger, Singapore Management University

• Xiaorui Huang, Boston College