Climate policy and transition risk in the housing market

Konstantinos Ferentinos (), Alex Gibberd () and Benjamin Guin
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Konstantinos Ferentinos: Lancaster University
Alex Gibberd: Lancaster University

No 918, Bank of England working papers from Bank of England

Abstract: Public policies aimed at mitigating climate change can come with the transition risk of sudden adjustments of asset prices. We study the consequences of a policy intervention addressing greenhouse gas emissions in the housing market. Leveraging a unique data set of the population of all house transactions in England and Wales, we document novel evidence of transition risk. Prices of carbon-intensive properties affected by this policy decreased by about £5,000 to £9,000 relative to unaffected ones. We interpret this result as evidence in favour of semi-strong market efficiency in the housing market. We infer moderate implications for financial stability and for the wealth distribution among homeowners.

Keywords: Climate policy; transition risk; house prices; financial stability; wealth inequality (search for similar items in EconPapers)
JEL-codes: C54 Q54 Q58 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2021-04-30
New Economics Papers: this item is included in nep-ene, nep-env, nep-reg and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:boe:boeewp:0918

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