Globalization, Firms and Greenhouse Gas Emissions

The increase in global temperatures is a key policy challenge of our time.In our project, we will use detailed data on firms – energy inputs, import patterns, balance sheets and worker characteristics – to answer three broader questions on this issue.We first ask how the outsourcing of production abroad affects the carbon intensity of Swedish firms.

We will employ novel econometric techniques to estimate the causal effect of offshoring on firm-level carbon emissions and the mechanisms involved. Do firms offshore carbon-intensive parts of their production chain to countries with low carbon taxes?

Or does offshoring make firms more productive due to increased specialization?Second, we analyze the role of the transportation sector in the emission of greenhouse gases. This sector is a significant emitter of CO2. But the transportation sector also facilitates trade, specialization and scale economies.

We will develop an index of a firm or sector’s impact on the environment that compares the dirtiness of Swedish production and transportation sectors in a novel way that also takes secondary effects on other sectors into account.Third, we analyze the role that CEOs play in determining the environmental performance of firms.

By tracking the movement of CEOs across firms we will analyze how important they are for aggregate CO2 emissions as well as through what mechanisms these effects operate. Finally, we will estimate the effect of Artificial Intelligence on firms´ CO2 emissions.