The Impact of Climate Policy on Oil and Gas Investment: Evidence from Firm-Level Data
IMF Working Papers, June 30, 2023
Source details
- Canonical URL
- The Impact of Climate Policy on Oil and Gas Investment: Evidence from Firm-Level Data
Other formats
Bibliographic details
- Authors: Christian Bogmans, Andrea Pescatori, Ervin Prifti
- Published: June 30, 2023
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400248443.001
Key findings
- Climate policies have led to a global decline of 6.5 percent in investment among publicly traded oil and gas companies between 2015 and 2019.
- European companies experienced the most significant impact from climate policies.
- Climate policy uncertainty also had a negative impact on oil and gas investment.
- Results support the Neoclassical investment model, which predicts a pre-emptive cut in investment in reaction to downward shifts in prospective demand.
- Results contrast with the “green paradox,” which predicts an increase in current investment to shift production toward the present.
Methodology and analytical approach
- Uses a text-based firm-level measure of climate policy exposure.
- Research design references DiD (difference-in-differences) as part of the analytical toolkit.
- Framed within investment model literature and the energy transition context.
Subjects and keywords
- Subjects: Carbon tax, Climate change, Climate policy, Economic sectors, Environment, Oil prices, Oil sector, Prices, Taxes
- Keywords: Carbon tax, Climate change, Climate policy, climate policy exposure, climate policy uncertainty, DiD, energy transition, Fossil fuel phase out, gas firm, gas investment, Global, investment model, Oil prices, Oil sector, Paris Agreement
IMF Working Papers — "The Impact of Climate Policy on Oil and Gas Investment: Evidence from Firm-Level Data" (June 30, 2023)
Content in this bundle
- Working Paper