Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/299588 
Year of Publication: 
2024
Series/Report no.: 
ECB Working Paper No. 2945
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
We investigate the impact of expectations about future climate policy on investment decisions of fossil fuel firms. Our empirical analysis reveals that firms with greater exposure to climate change significantly increased their investment in response to the Paris Agreement, in contrast to firms with lower exposure. Importantly, investment was directed towards traditional activities in the fossil fuel industry. By contrast, there are no indications that firms invested to transition towards renewable energy sources nor in making production less carbon-intensive. Our findings contribute to the ongoing discussion about the potential adverse effects of delays in the implementation of climate regulation.
Subjects: 
climate change
fossil fuels
policy
investment
green paradox
JEL: 
G31
G38
Q58
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-6755-6
Document Type: 
Working Paper

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