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Research: When Environmental Regulations Are Tighter at Home, Companies Emit More Abroad

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If we want to avoid the most damaging effects of climate change, countries need to work together to limit pollution and keep global warming to under 1.5 degrees Celsius. But countries differ in their approaches towards environmental regulation. This makes a difference.

New research finds that companies, which are the biggest contributors of CO2 emissions, emit less CO2 at home when domestic environmental regulations are strict. However, these companies also emit more abroad, particularly in countries with laxer environmental standards. Fortunately, the higher foreign emission levels do not outweigh the reduction at home.

Some are trying to reduce carbon dioxide emissions by enforcing strict environmental policies. Others are considering withdrawing from the Paris Agreement designed to collectively combat climate change – or already have.at the Open University in the Netherlands. She also holds the positions of Associate Professor of Finance at the Maastricht University in the Netherlands and Professor Extraordinary at the University of Stellenbosch Business School in South Africa.

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