How does government climate risk perception affect corporate energy consumption and intensity?

Abstract

Fossil energy consumption is an important factor contributing to global warming, which profoundly impacts healthy economic and social development. Moreover, as a leader in the fight against climate change, the government's climate perception has a crucial influence on the fight against climate change. Based on Chinese government work reports and microlevel enterprise data, this study combines machine learning and text analysis methods to construct a government climate risk perception indicator. The study systematically examines the impact of government climate risk perception on corporate fossil energy consumption and intensity. The results reveal that (1) A 1 % increase in the government's climate risk perception leads to a respective 1.67 % and 1.71 % reduction in corporate energy consumption and energy intensity. (2) A 1 % increase in government climate risk perception corresponds to a 0.274 % increase in environmental regulation, reduces firms' low-quality energy consumption by 0.001 %, and increases firms' high-quality energy consumption by 0.001 %, lowering overall fossil energy consumption. (3) The negative effect of government climate risk perception on fossil energy consumption and intensity is more significant for small-scale firms, firms subject to high environmental regulatory intensity, and dry and wet climate zones. (4) The spatial spillover effect test shows that a 1 % increase in government climate risk perception will reduce neighboring areas' energy consumption by 7.5 %, indicating that government climate risk perception will not only affect local energy consumption, but also affects neighboring areas' energy consumption. Finally, the study presents proposed policy recommendations for governments to navigate climate change risks and facilitate the global energy transition, and achieve sustainable development goals.