Charting a “Green Path” for Recovery from COVID-19
(2020) In Environmental and Resource Economics 76(4). p.825-853- Abstract
Should the economic recovery from the 2019 novel coronavirus disease (COVID-19) be green? The current crisis is so severe that we should not take the answer for granted. It requires serious thought and we start by reviewing some arguments for and against a green approach. A crucial element is of course to see how different industries fare in the current crisis. Our empirical contribution is to examine daily stock returns for firms from the STOXX Europe 600 index. We find that firms with higher carbon intensities experienced significantly large decreases in stock values particularly those within the crude petroleum extraction, air transport and coke and refined petroleum industries. Our tentative conclusion is that efforts to revitalize... (More)
Should the economic recovery from the 2019 novel coronavirus disease (COVID-19) be green? The current crisis is so severe that we should not take the answer for granted. It requires serious thought and we start by reviewing some arguments for and against a green approach. A crucial element is of course to see how different industries fare in the current crisis. Our empirical contribution is to examine daily stock returns for firms from the STOXX Europe 600 index. We find that firms with higher carbon intensities experienced significantly large decreases in stock values particularly those within the crude petroleum extraction, air transport and coke and refined petroleum industries. Our tentative conclusion is that efforts to revitalize the economy should avoid subsidizing stranded assets and instead target the industries of the future. However, identifying these will not necessarily be easy. We find, for example, that having an official ESG “climate change policy” has no effect on firm performance during the pandemic. We suggest possible ways of designing a new form of more informative index.
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- author
- Mukanjari, Samson LU and Sterner, Thomas
- publishing date
- 2020-08-01
- type
- Contribution to journal
- publication status
- published
- keywords
- Carbon emissions, Climate change, Climate policy, COVID-19, Green recovery, Stock returns
- in
- Environmental and Resource Economics
- volume
- 76
- issue
- 4
- pages
- 29 pages
- publisher
- Springer
- external identifiers
-
- scopus:85088936838
- ISSN
- 0924-6460
- DOI
- 10.1007/s10640-020-00479-0
- language
- English
- LU publication?
- no
- additional info
- Funding Information: Open access funding provided by University of Gothenburg. We thank Ian Bateman, Bo Becker, Estelle Cantillon, Christian Gollier, Simon Sch?rz, Elin Lokrantz and an anonymous referee for helpful comments and suggestions that have contributed to this work. Financial support for this project has been generously provided by L?nsf?rs?kringars Forskningsfond?and the Adlerbert Research Foundation. Funding Information: Open access funding provided by University of Gothenburg. We thank Ian Bateman, Bo Becker, Estelle Cantillon, Christian Gollier, Simon Schürz, Elin Lokrantz and an anonymous referee for helpful comments and suggestions that have contributed to this work. Financial support for this project has been generously provided by Länsförsäkringars Forskningsfond and the Adlerbert Research Foundation. Publisher Copyright: © 2020, The Author(s).
- id
- e0997e02-7687-4709-8626-e11accfe909b
- date added to LUP
- 2022-04-05 13:21:12
- date last changed
- 2023-09-01 17:12:44
@article{e0997e02-7687-4709-8626-e11accfe909b, abstract = {{<p>Should the economic recovery from the 2019 novel coronavirus disease (COVID-19) be green? The current crisis is so severe that we should not take the answer for granted. It requires serious thought and we start by reviewing some arguments for and against a green approach. A crucial element is of course to see how different industries fare in the current crisis. Our empirical contribution is to examine daily stock returns for firms from the STOXX Europe 600 index. We find that firms with higher carbon intensities experienced significantly large decreases in stock values particularly those within the crude petroleum extraction, air transport and coke and refined petroleum industries. Our tentative conclusion is that efforts to revitalize the economy should avoid subsidizing stranded assets and instead target the industries of the future. However, identifying these will not necessarily be easy. We find, for example, that having an official ESG “climate change policy” has no effect on firm performance during the pandemic. We suggest possible ways of designing a new form of more informative index.</p>}}, author = {{Mukanjari, Samson and Sterner, Thomas}}, issn = {{0924-6460}}, keywords = {{Carbon emissions; Climate change; Climate policy; COVID-19; Green recovery; Stock returns}}, language = {{eng}}, month = {{08}}, number = {{4}}, pages = {{825--853}}, publisher = {{Springer}}, series = {{Environmental and Resource Economics}}, title = {{Charting a “Green Path” for Recovery from COVID-19}}, url = {{http://dx.doi.org/10.1007/s10640-020-00479-0}}, doi = {{10.1007/s10640-020-00479-0}}, volume = {{76}}, year = {{2020}}, }