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Political Science > Environmental Policy

You are looking at 1 - 4 of 4 items for :

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Cover IMF Working Papers
Decomposing Climate Risks in Stock Markets
Yuanchen Yang, Chengyu Huang, and Yuchen Zhang
Climate change poses an unprecedented challenge to the world economy and the global financial system. This paper sets out to understand and quantify the impact of climate mitigation, with a focus on climate-related news, which represents an important information source that investors use to revise their subjective assessments of climate risks. Using full-text data from Financial Times from January 2005 to March 2022, we develop machine learning-based indicators to measure risks from climate mitigation, and the direction of the risk is identified through manual labels. The documented risk premium indicates that climate mitigation news has been partially priced in the Canadian stock market. More specifically, stock prices react positively to market-wide climate-favorable news but they do not react negatively to climate-unfavorable news. The results are robust to different model specifications and across equity markets.
Keywords:
Climate Mitigation; Machine Learning; Asset Pricing; climate mitigation news; climate news factor; sorting strategy; EU stock market; climate news coverage; Climate change; Climate policy; Oil sector; Asset prices; Global
Cover IMF Working Papers
The Impact of Climate Policy on Oil and Gas Investment: Evidence from Firm-Level Data
Mr. Christian Bogmans, Mr. Andrea Pescatori, and Ervin Prifti
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.
Keywords:
Fossil fuel phase out; Paris Agreement; energy transition; DiD; climate policy uncertainty; gas investment; investment model; climate policy exposure; gas firm; Climate policy; Oil sector; Climate change; Oil prices; Carbon tax; Global
Cover Selected Issues Papers
Assessing Recent Climate Policy Initiatives in the Netherlands: NETHERLANDS
Chen Chen, Koralai Kirabaeva, Emanuele Massetti, Danielle N Minnett, Ian W.H. Parry, Tim Tjeerd, Sylke von Thadden-Kostopoulos, and Geoffroy Dolphin
The Netherlands has committed to the EU’s ambitious targets for cutting greenhouse gas emissions by 2030 and emissions neutrality in 2050 but at the same time is also vulnerable to sea-level rise and flood risks. This paper reviews recent mitigation policy initiatives in the Netherlands, including carbon levies for the industry and power sectors, energy and car tax reforms, and air passenger taxes, and recommends some modifications to these initiatives. The paper also provides assessments of hazards and macroeconomic risks from weather shocks and climate change and assesses the adaption plan against key principles on mainstream climate change into macro-fiscal planning.
Keywords:
Carbon levy; carbon pricing; climate change adaptation; climate change mitigation; emissions trading system; energy taxes; floods; green PFM; Netherlands climate strategy; price floor; sea-level rise; policy initiative; adaption initiatives in the Netherlands; Policy recommendation; C. assessing climate risk; Climate change; Natural disasters; Climate policy; Greenhouse gas emissions; Natural gas sector; Northern Europe; Global
Cover Staff Climate Notes
How to Cut Methane Emissions
Ian W.H. Parry, Mr. Simon Black, Danielle N Minnett, Mr. Victor Mylonas, and Nate Vernon
Limiting global warming to 1.5 to 2°C above preindustrial levels requires rapid cuts in greenhouse gas emissions. This includes methane, which has an outsized impact on temperatures. To date, 125 countries have pledged to cut global methane emissions by 30 percent by 2030. This Note provides background on methane emission sources, presents practical fiscal policy options to cut emissions, and assesses impacts. Putting a price on methane, ideally through a fee, would reduce emissions efficiently, and can be administratively straightforward for extractives industries and, in some cases, agriculture. Policies could also include revenue-neutral ‘feebates’ that use fees on dirtier polluters to subsidize cleaner producers. A $70 methane fee among large economies would align 2030 emissions with 2oC. Most cuts would be in extractives and abatement costs would be equivalent to just 0.1 percent of GDP. Costs are larger in certain developing countries, implying climate finance could be a key element of a global agreement on a minimum methane price.
Keywords:
Climate change mitigation; methane emissions; Global Methane Pledge; carbon pricing; methane tax; extractives; agriculture; design issues; border methane adjustment; international price floor; IMF staff Climate note; methane emission; IMF staff Climate Note 2022/008; IMF analysis; Greenhouse gas emissions; Natural gas sector; Agricultural sector; Agricultural commodities; Global