Beatrice Weder di Mauro, 12 October 2021

Governments will need to impose more carbon taxes, but central banks need to deliver price stability. So what is the effect of these taxes on inflation and economic activity? New research examines three decades of data from Canada and Europe.
 

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Patrick Bolton, 05 October 2021

Do financial markets penalise firms that emit a lot of carbon, and is this an incentive for them to reduce emissions? Patrick Bolton of Columbia Business School has analysed the financial returns to estimate how carbon risk is priced.

Patrick Bolton, Marcin Kacperczyk, 24 March 2021

A company’s carbon-transition risk – associated with curbing carbon emissions within a relatively short period of time – is proportional to the size and growth rate of the company’s carbon emissions. This column asks whether companies with different carbon emissions have different stock returns. The total level of a company’s CO2 emissions and the year-by-year growth in emissions significantly affect its stock returns in most geographic areas of the world. The increasing cost of equity for companies with higher emissions can be a form of carbon pricing by investors seeking compensation for carbon-transition risk.

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