Measuring and assessing the effects of climate policy uncertainty

Clara Berestycki, Stefano Carattini, Antoine Dechezleprêtre and Tobias Kruse

No 1724, OECD Economics Department Working Papers from OECD Publishing

Abstract: This study proposes a new indicator of Climate Policy Uncertainty based on newspaper coverage frequency. The indicator currently includes 12 OECD Member Countries and covers the period 1990-2018. The index spikes near major political events and during major discussions around potentially significant climate policy changes. Using a global firm-level dataset, the empirical analysis shows that Climate Policy Uncertainty is associated with economically and statistically significant decreases in investment, particularly in pollution-intensive sectors that are most exposed to climate policies, and among capital-intensive companies. In addition to annual series, the study also provides the indicator at higher frequencies of monthly and quarterly levels, and develops sub-indices that capture the direction of climate policy uncertainty associated with a strengthening or a weakening of climate policies for a sub-set of countries.

Keywords: beliefs; climate policy; investment; Uncertainty (search for similar items in EconPapers)
JEL-codes: D22 D83 G10 O32 Q58 (search for similar items in EconPapers)
Date: 2022-08-26
New Economics Papers: this item is included in nep-ene and nep-env
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:oec:ecoaaa:1724-en

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