Global Pricing of Carbon-Transition Risk

By Patrick Bolton, Marcin T. Kacperczyk. Social Science Research Network, 2021

668 citations recorded by the source corpus.

The energy transition away from fossil fuels exposes companies to carbon‐transition risk. Estimating the market‐based premium associated with carbon‐transition risk in a cross section of 14,400 firms in 77 countries, we find higher stock returns associated with higher levels and growth rates of carbon emissions in all sectors and most countries. Carbon premia related to emissions growth are greater for firms located in countries with lower economic development, larger energy sectors, and less inclusive political systems. Premia related to emission levels are higher in countries with stricter domestic climate policies. The latter have increased with investor awareness about climate change risk.This article is protected by copyright. All rights reserved

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/73899b61683014cc50888ddc9275977f111c2afc

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In Economics and Econometrics

1. Christian Leuz
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Citations in the corpus

• Mandatory CSR and sustainability reporting: economic analysis and literature review (2019, background): “Exploring the mechanism, Jouvenot and Krueger (2020) pinpoint investor pressures as a potential driver of the effects, consistent with Bolton and Kacpercyk (2021). Similar to Tomar (2021), Grewal (2021) finds that emission reductions are related to peer benchmarking. The EU has also passed several d”