Extreme high temperatures and corporate low-carbon actions

Abstract

Greenhouse gas emissions are considered the culprit of extreme high temperatures, and low-carbon transformation has become a global consensus. The low-carbon action by enterprises is an inevitable choice if they are to adapt to economic and social needs. Green innovation is an important measure for enterprises to respond to the challenges of low-carbon transformation. This study mainly discusses the causal relationship between extreme high temperatures and green innovation of enterprises. Using China's industrial enterprise database, we construct county-annual panel data from 2000 to 2013. Results show that extreme high temperatures improve the level of green innovation of enterprises. After a series of robustness tests, the results remain. Mechanism analysis shows that extreme high temperatures increase the environmental concerns of the government, the public, and society, thus strengthening government regulation, public participation, and social supervision as well as encouraging enterprises to carry out green innovation. Our heterogeneous analysis shows that in the eastern region with a high level of legal system and economic development, it is easier to promote green innovation for enterprises. In addition, large-scale enterprises are more willing to carry out green innovation after experiencing a heat wave.

Keywords: Climate risk; Extreme high temperature; Green innovation; Green transformation.