Measuring the Effects of an Optimization in Brazilian Environmental Regulation in the Oil and Gas Sector

Thiago Costa Monteiro Caldeira (), Mathias Schneid Tessmann (), Rogerio Boueri Miranda () and Danny de Castro Soares ()
Additional contact information
Thiago Costa Monteiro Caldeira: Brazilian Institute of Education, Development and Research - IDP, Brazil
Mathias Schneid Tessmann: Brazilian Institute of Education, Development and Research - IDP, Brazil
Rogerio Boueri Miranda: Brazilian Institute of Education, Development and Research - IDP, Brazil
Danny de Castro Soares: Brazilian Institute of Education, Development and Research - IDP, Brazil

International Journal of Energy Economics and Policy, 2025, vol. 16, issue 1, 60-74

Abstract: This paper aims to investigate the oil and gas sector in Brazil by assessing how much its results would improve if there were an optimization in environmental regulation. To this end, data from 5 companies traded on the Sa?o Paulo stock exchange, the capital asset price model, and input-output matrices are considered. The difference between the CAPM betas of Brazilian firms and firms from benchmark countries is used to estimate the weighted average cost of capital with more efficient environmental governance in the country, which is then used to perform simulations in the input- output matrices. The results indicate that the destruction of the value of investments can vary between 33 and 110 billion reais in 5 years for delays in licensing of 6 and 24 months, respectively, and negative effects on GDP can reach 70 billion reais in 5 years for delays of 6 months in the licensing process. These findings underscore the importance of effective environmental governance for the country and are valuable for policymakers, investors, and supply chain agents who consider the sector in their decision-making.

Keywords: Oil and Gas; Capital Asset Price Model; Input-Output Matrix; Brazilian Oil and Gas Sector (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://econjournals.com/index.php/ijeep/article/download/20719/9578 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:v:16:y:2025:i:1:id:20719

Ordering information: This journal article can be ordered from
https://econjournals.com/index.php/ijeep

DOI: 10.32479/ijeep.20719

Access Statistics for this article

More articles in International Journal of Energy Economics and Policy from International Journal of Energy Economics and Policy
Bibliographic data for series maintained by Monica Sinhat ().