Friday, October 9, 2009: 9:40 AM
Participation in Green Power Partnership: What Distinguishes Leaders, Partners and Non-Participants?
Suchandra Basu[1], Soma Ghosh[2] and Wayne B. Gray[3]
Abstract
The current emphasis on significantly reducing greenhouse gas emissions to accelerate the development of a low-carbon economy has lead to an increasing pressure on organizations and consumers to actively practice energy efficiency. The literature on environmental performance of firms finds that financial performance, stakeholder pressures, regulatory compliance, economic opportunities, ethical concerns, competitive advantage, appeal to consumers, among others, motivate participation in energy efficiency programs such as Green Lights and Energy Star. This paper examines what drives Fortune 500 companies to participate in EPA’s Green Power Partnership (GPP), a voluntary program designed to promote renewable energy use in the total electricity consumption of participating organizations. We estimate a cross-section probit model to analyze factors that determine probability of participation in the GPP using data compiled from the EPA, IRRC, and COMPUSTAT for 2006. Preliminary results provide some collective support for the established hypothesis that firms participate in voluntary environmental programs like the GPP only if there is a positive net benefit of joining the program.
Keywords: Energy efficiency, renewable energy, firm characteristics
JEL code: Q48, L20
Suchandra Basu[1], Soma Ghosh[2] and Wayne B. Gray[3]
The current emphasis on significantly reducing greenhouse gas emissions to accelerate the development of a low-carbon economy has lead to an increasing pressure on organizations and consumers to actively practice energy efficiency. The literature on environmental performance of firms finds that financial performance, stakeholder pressures, regulatory compliance, economic opportunities, ethical concerns, competitive advantage, appeal to consumers, among others, motivate participation in energy efficiency programs such as Green Lights and Energy Star. This paper examines what drives Fortune 500 companies to participate in EPA’s Green Power Partnership (GPP), a voluntary program designed to promote renewable energy use in the total electricity consumption of participating organizations. We estimate a cross-section probit model to analyze factors that determine probability of participation in the GPP using data compiled from the EPA, IRRC, and COMPUSTAT for 2006. Preliminary results provide some collective support for the established hypothesis that firms participate in voluntary environmental programs like the GPP only if there is a positive net benefit of joining the program.
Keywords: Energy efficiency, renewable energy, firm characteristics
JEL code: Q48, L20
[1] Assistant Professor, Department of Economics and Finance, Rhode Island College, Phone: (401) 456-9518, Fax: (401) 456-8759, Email: sbasu@ric.edu (contact author)
[2] Assistant Professor, Bridgewater State College
[3] Professor, Department of Economics, Clark University,
[2] Assistant Professor, Bridgewater State College
[3] Professor, Department of Economics, Clark University,