The Paris Agreement adopted at the twenty-first Conference of the Parties (COP21) under the UN Framework Convention for Climate Change (UNFCCC) is a landmark agreement to reduce global greenhouse gas (GHG) emissions. While emissions have not decreased since COP21, the growth rate has declined relative to “business as usual,” and there is an open question as to whether the Paris Agreement contributed to this decline. Changing firm behavior is key to driving climate mitigation, so we ask: to what extent did the Paris Agreement lead firms to decarbonize?
This paper examines whether the Paris Agreement shifted corporate strategy in “convertible” industries, focusing on the automotive sector.