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CCGES > Current Projects > Climate Change, Regulation and Business: Canada and Germany Compared

Climate Change, Regulation and Business: Canada and Germany Compared

Climate change is one of the key issues on the transatlantic agenda. Canada and Germany are both signatories to the 1997 Kyoto Protocol but their climate policy trajectories have diverged dramatically. Whereas Germany has adopted a comprehensive and quite stringent regulatory framework to curb greenhouse gas emissions, the federal government of Canada has shied away from imposing hard restrictions, or taxes, on carbon emissions. And while Germany has already achieved its Kyoto target of a 21% reduction of emissions from 1990 levels by 2008-2012, Canada has failed more dramatically than any other country to comply, increasing instead its emissions by 25% (1990-2005), which puts it more than 30% above its Kyoto target of a 6% reduction.

To date, research on climate policy in political science and international relations has focused overwhelmingly on the emergence and character of regulatory regimes on both national and international levels: why do they emerge, whom do they benefit, and are they effective? The business administration literature on business and climate change, meanwhile, has tended to investigate the issue mostly as a laboratory for understanding global strategies of multinational corporations (MNC). Here, the focus lies on how MNC seek to influence or accommodate regulatory approaches.

However, there is little comparative research so far on how different regulatory frameworks in individual jurisdictions relate to and co-evolve with business activities and strategies, beyond simple lobbying: do strong regulatory frameworks determine business behaviour or do business activities rather help to build, enact and sustain these regulatory frameworks? Do weak regulatory frameworks leave more room for innovative business responses or do they simply result in business inactivity on carbon control?

The project investigates these questions through a comparative case study of the co-evolution of regulatory regimes and climate-related business activities in Canada and Germany. These two countries provide a perfect empirical terrain to investigate patterns of co-evolution as they can be considered as two extremes poles on a continuum between weak and strong regulatory regimes.

The project systematically reconstructs the co-evolution of regulation and business activities in both countries starting with the negotiations of the Kyoto Protocol. Business responses to climate change will be investigated both on a collective, industry association level as well as on aggregated company level, drawing on available data sources such as the Carbon Disclosure Project (CDP) reports.

Research Directors: Prof. Burkard Eberlein, Schulich School of Business (Policy) & Prof. Dirk Matten, Schulich School of Business (Strategic Management)
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