The Impact of Climate Policy on Oil and Gas Investment: Evidence from Firm-Level Data
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Summary:
Using a text-based firm-level measure of climate policy exposure, we show that climate policies have led to a global decline of 6.5 percent in investment among publicly traded oil and gas companies between 2015 and 2019, with European companies experiencing the most significant impact. Similarly, climate policy uncertainty has also had a negative impact. Results support the Neoclassical investment model, which predicts a pre-emptive cut in investment in reaction to downward shifts in prospective demand, in contrast with the “green paradox” that predicts an increase in current investment to shift production toward the present.
Series:
Working Paper No. 2023/140
Subject:
Carbon tax Climate change Climate policy Economic sectors Environment Oil prices Oil sector Prices Taxes
Frequency:
regular
English
Publication Date:
June 30, 2023
ISBN/ISSN:
9798400248443/1018-5941
Stock No:
WPIEA2023140
Format:
Paper
Pages:
46
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