Revealing climate change opinions through investment behavior: Evidence from Fukushima

Zhen Lei and Anastasia Shcherbakova

Journal of Environmental Economics and Management, 2015, vol. 70, issue C, 92-108

Abstract: In this study we present a novel research approach to obtaining behavior-based evidence of regional climate change attitudes, using the 2011 Fukushima nuclear plant incident as a natural experiment. Our approach allows us to produce the first non-survey-based empirical evidence of a trans-Atlantic divide in public opinion on the environment and climate change that investors assign to fossil-based and renewable energy. This value is based on the perceived potential of these fuel types to substitute for nuclear generation in the aftermath of the Fukushima crisis. We carry out an event study to examine differences in abnormal returns of global coal and renewable energy companies on European and American stock exchanges. We find that investors trading on U.S. markets exhibit a significantly more favorable perception of coal stock profitability, while investors trading on European exchanges display a more favorable perception about profitability of renewable energy stocks.

Keywords: Climate change; Public opinion; Event study; Financial markets; Stock returns; Fukushima (search for similar items in EconPapers)
JEL-codes: G02 G11 G14 Q4 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:70:y:2015:i:c:p:92-108

DOI: 10.1016/j.jeem.2015.01.004

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