Analytical Framework

In Jon Birger Skjærseth and Per Ove Eikeland (eds), Corporate Responses to EU Emissions Trading: Resistance, Innovation or Responsibility? Farnham (UK), Ashgate, 2013, pp. 19-43.

This chapter presents the analytical framework for explaining observed variation in climate strategies, with special emphasis on corporate response to the EU ETS. It defines and conceptualize corporate climate strategies on a continuum from reactive to innovative strategies. Next, the chapter develops three models that each generate specific expectations about how companies will respond. The first model - companies as reluctant adapters - expects company responses in the direction of reactive strategies: opposition to environmental regulation and adaptation at he lowest cost possible. The second model - companies as innovators - expects that appropriately designed regulation will stimulate exploration, experimentation and innovtion in firms. The final model portrays compnaies as socially responsible actors, underscoring the importance of corporate social responsibility and how regulation may 'crowd in' or 'crowd out' environmental norms.