Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171160
Authors: 
Sen, Suphi
von Schickfus, Marie-Theres
Year of Publication: 
2017
Series/Report no.: 
ifo Working Paper No. 238
Abstract: 
The goal to keep global warming below 2°C implies that many energy-sector assets are at risk of becoming stranded. This paper investigates whether and how investors price in stranded asset risk due to climate policy. We exploit the gradual development of a German climate policy proposal aimed at reducing electricity production from coal and analyze its effect on the valuation of energy utilities. We find that investors do care about stranded asset risk due to climate policy, but that they also expect a financial compensation policy for their stranded assets. We show that these results are not driven by contemporaneous confounding events.
Subjects: 
Stranded assets
climate policy
JEL: 
Q35
Q38
G14
Document Type: 
Working Paper

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