Paper Filling the Governance Gap: Corporate Commitments and Environmental Externalities in the African Oil Sector

We examine how oil companies fulfill sustainability commitments and the implications for pollution in Africa. Gas flaring in continuously operated blocks declines by 35% after operators commit to Zero Routine Flaring, with a larger reduction where public governance is weaker. Committers are awarded fewer blocks and flare less in these blocks while committed-to-uncommitted divestitures, though rare, lead to 70% more flaring. Overall, operational investments dominate ownership changes, reducing net carbon-equivalent emissions by 43 million metric tons. These results suggest that commitments impose a uniform firm-wide cost of pollution, prompting greater improvements where the regulatory floor is lower.

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