The pricing of low emission transitions: Evidence from stock returns of natural resource firms in the GCC

Pan, Changchun; Sun, Tiezhu; Mirza, Nawazish; Huang, Yuzhe

doi:10.1016/j.resourpol.2022.102986

Cited by 11 publications

(1 citation statement)

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“…The researchers tested this theory by employing proxies derived from several large datasets for prediction purposes. In an effort to assess whether investors require a risk premium when transitioning to low emission firms, Mirza et al conducted a study using a time series sample of firms from six GCC countries spanning the years 2011 to 2020 [9]. They introduced an emission-based risk factor into the conventional asset pricing framework.…”

Section: Application Of Asset Pricing In Green Financementioning

confidence: 99%

Impact of Carbon Prices on Stock Returns: Evidence from China's High-Carbon Industries

2023

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Carbon trading is a key tool in the financial sector's shift towards a sustainable model in response to climate change, which is a market-based approach to regulating greenhouse gas emissions. This paper examines the impact of carbon prices on stock returns. The study utilizes an improved three-factor model and data from 40 stocks in China's highcarbon industries, as well as a control group of 80 stocks from other industries. The empirical findings reveals that high-emitting companies are negatively affected by carbon trading prices, leading to lower stock returns. This suggests that the impact of carbon trading prices on costs and investor confidence outweighs the carbon risk premium. However, the results differ for industries in the control group, indicating that the conclusions may not apply universally.

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Section: Application Of Asset Pricing In Green Financementioning

confidence: 99%