Discussion paper

DP16061 Limits to Private Climate Change Mitigation

In the absence of sufficient support for carbon taxes, a more sustainable approach to finance—one that incorporates environmental, social, and governance (ESG) considerations—could be part of the way forward to address climate change. However, our analysis suggests that ESG scores tend to reflect what firms say they (will) do, not what they actually do, to contain their carbon footprints and do not capture differences across firms in their contributions to climate change. Continued efforts to build consensus for effective economy-wide policies targeting carbon emissions remain crucial.


Elmalt, D and D Kirti (eds) (2021), “DP16061 Limits to Private Climate Change Mitigation”, CEPR Press Discussion Paper No. 16061. https://cepr.org/publications/dp16061