In 2009, the promise of a comprehensive federal cap and trade bill to address climate change fell apart. At least in part, this was due to the fears that exotic 'carbon' financial instruments might cause more financial crises. As California launches it economy wide carbon trading system, and...

According to classic economic views of social responsibility as esposed by Milton Friedman, one would expect markets to penalize companies for undertaking social or environmental initiatives beyond minimal compliance with legal requirements, because such activities arguably may divert a firm's...

This study documents that investors care about companies' greenhouse gas (GHG) emission disclosures. Three kinds of evidence support this finding. First, using companies that disclose GHG emissions voluntarily through the Carbon Disclosure Project (CDP), we show that investors act as if they use...

In contrast to research studies on developed markets, there is scarce evidence about the relationship between firms' economic and environmental performance in emerging markets. In this paper, evidence is provided for such a link by showing that publicly traded firms at the Lima Stock Exchange...

We show a reliable association between voluntary CSR disclosure and company political interests, which we proxy by company employees' contributions to political action committees and statewide voting in presidential elections. This relation is most pronounced for the contributions of Democratic...

Voluntary disclosure theory predicts that an optimal disclosure decision should produce an overall net benefit for shareholders, and that such net benefit should decrease in public information availability. This study supports the predictions of voluntary disclosure theory in the context of...

This paper examines the efficiency of the European market for carbon dioxide emission allowances. To this end, spot and futures market data are analyzed from Powernext, Nord Pool and ECX, the three main exchanges under the European Union Emission Trading Scheme (EU ETS). The methodology employs...

Market-based (or economic incentive) control strategies have been used in a variety of environmental contexts for over 25 years. Due to political and economic theories, their use has been proliferating in more and more contexts. This chapter discusses the underlying theory of using markets or...

That climate policies are costly is evident and therefore often creates major fears. But the alternative (no action) also has a cost. Mitigation costs and damages incurred depend on what the climate policies are; moreover, they are substitutes. This brings climate policies naturally in the realm...

Focussing on the prime example of CO2 emissions, we discuss several important theoretical and econometric problems that arise when studying environmental Kuznets curves (EKCs). The dominant theoretical approach is given by integrated assessment modelling, which consists of economic models that...