20231123-IMF-Mitigating_Climate_Change_at_the_Firm_Level_Mind_the_Laggards_81页_1mb

Firm-Level Mitigation of Climate Change: Addressing Laggards

Summary

The paper examines the heterogeneity in environmental performance among large listed firms and evaluates mitigation policies. Firms within the same industry and country exhibit significant differences in emission intensities, with laggards having older capital, lower knowledge intensity, and poorer management practices.

A novel general equilibrium heterogeneous-firm model incorporates capital vintage choices and R&D. Calibration shows that policies reducing dispersion—like capital upgrades—may not align with broader economic goals due to high costs. Capital subsidies increase long-run consumption but distort input allocation, while carbon taxes have smaller GDP costs but better coverage.

The analysis highlights policy trade-offs: capital subsidies cut emissions via upgrades but at high cost; carbon taxes efficiently reduce emissions but lessen dispersion. Disparities in firm characteristics drive distributional effects, while technology transfers to EMDEs yield mixed results due to energy use increases.

Conclusion: Climate policies must balance efficiency, distribution, and firm-level technology adoption to achieve decarbonization targets.