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Do markets Trump politics? Fossil and renewable market reactions to major political events

Mukanjari, Samson LU orcid and Sterner, Thomas (2024) In Economic Inquiry 62(2). p.805-836
Abstract
We investigate the effects of three events with major importance for climate policy on energy sector stocks: the Paris Agreement, the Trump election and presidency, and the Biden election. By combining event studies with impulse-indicator saturation methods, we show that the Paris Agreement and the election of Mr. Biden benefited renewable industries, while the election of Mr. Trump had negative effects. For fossil fuel industries, the effects were largely the opposite. Despite Trump's efforts to eliminate environmental regulations, his presidency did however witness a decrease in both US coal production and consumption, while natural gas and oil consumption increased.
Please use this url to cite or link to this publication:
author
and
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
climate policy, elections, energy, event study, Paris Agreement, Stock returns, stranded assets
in
Economic Inquiry
volume
62
issue
2
pages
805 - 836
publisher
Wiley-Blackwell
external identifiers
  • scopus:85178955816
ISSN
1465-7295
DOI
10.1111/ecin.13195
language
English
LU publication?
yes
id
405b294a-4864-4594-8778-32e44e8d0d9f
date added to LUP
2023-12-15 15:57:43
date last changed
2024-04-11 15:33:19
@article{405b294a-4864-4594-8778-32e44e8d0d9f,
  abstract     = {{We investigate the effects of three events with major importance for climate policy on energy sector stocks: the Paris Agreement, the Trump election and presidency, and the Biden election. By combining event studies with impulse-indicator saturation methods, we show that the Paris Agreement and the election of Mr. Biden benefited renewable industries, while the election of Mr. Trump had negative effects. For fossil fuel industries, the effects were largely the opposite. Despite Trump's efforts to eliminate environmental regulations, his presidency did however witness a decrease in both US coal production and consumption, while natural gas and oil consumption increased.}},
  author       = {{Mukanjari, Samson and Sterner, Thomas}},
  issn         = {{1465-7295}},
  keywords     = {{climate policy; elections; energy; event study; Paris Agreement; Stock returns; stranded assets}},
  language     = {{eng}},
  month        = {{03}},
  number       = {{2}},
  pages        = {{805--836}},
  publisher    = {{Wiley-Blackwell}},
  series       = {{Economic Inquiry}},
  title        = {{Do markets Trump politics? Fossil and renewable market reactions to major political events}},
  url          = {{http://dx.doi.org/10.1111/ecin.13195}},
  doi          = {{10.1111/ecin.13195}},
  volume       = {{62}},
  year         = {{2024}},
}