Advances in Economics, Management and Political Sciences

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Proceedings of the 3rd International Conference on Business and Policy Studies

Series Vol. 67 , 05 January 2024


Open Access | Article

Carbon Risk Assessment in Investing Decision-Making: The Role of Carbon Pricing Policies

Zifei Hu * 1
1 University of Pennsylvania

* Author to whom correspondence should be addressed.

Advances in Economics, Management and Political Sciences, Vol. 67, 94-101
Published 05 January 2024. © 2023 The Author(s). Published by EWA Publishing
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Citation Zifei Hu. Carbon Risk Assessment in Investing Decision-Making: The Role of Carbon Pricing Policies. AEMPS (2024) Vol. 67: 94-101. DOI: 10.54254/2754-1169/67/20241270.

Abstract

This study looks thoroughly into the important relationship between carbon risk assessment and investment decision-making, with a specific emphasis on the consequences of various carbon pricing regimes. Understanding how carbon risk and pricing regulations effect investment portfolios is critical in today’s world, when environmental sustainability and battling climate change are vital. To clarify the topic, the study conducts a thorough assessment of current research, evaluating the several ways in which carbon price influences investment decisions. It also offers light on carbon risk measurement approaches and frameworks, providing critical insights into the complexity of environmental economics. Furthermore, the paper adds empirical case studies to its narrative, offering real-world context to theoretical frameworks and shining light on the actual implications of carbon risks and price on investment strategies. The findings are useful for investors, policymakers, and scholars attempting to navigate the complex environment of sustainable investing in a carbon-constrained society.

Keywords

carbon risk assessment, ESG, carbon pricing policies, responsible investment

References

1. Stern, Nicholas and Joseph Stiglitz. (2017) Report of the high-level commission on carbon prices.

2. Stern, Nicholas and Joseph Stiglitz. (2021) The social cost of carbon, risk, distribution, market failures: An alternative approach. NBER Working Paper 28472

3. Lindsey, R. (2023, May 12) Climate Change: Atmospheric Carbon Dioxide. Climate.gov. Retrieved 2023, Sep 9, from https://www.climate.gov/news-features/understanding-climate/climate-change-atmospheric-carbon-dioxide

4. Li, Y., Ding, T., & Zhu, W. (2022). Can Green Credit Contribute to Sustainable Economic Growth? An Empirical Study from China. Sustainability, 14(11), 6661.

5. The London School of Economics and Political Science. (2019, November 1). What is a carbon price and why do we need one? https://www.lse.ac.uk/granthaminstitute/explainers/what-is-a-carbon-price-and-why-do-we-need-one/

6. World Bank. (2022). State and Trends of Carbon Pricing 2022. Retrieved from http://hdl.handle.net/10986/37455.

7. Bolton, Patrick and Kacperczyk, Marcin T. (October 30, 2020) Do Investors Care about Carbon Risk? Columbia Business School Research Paper Forthcoming, Journal of Financial Economics (JFE), Forthcoming, European Corporate Governance Institute - Finance Working Paper 711/2020

8. Setzer, J. (2022). The Impacts of High-Profile Litigation against Major Fossil Fuel Companies. In C. Rodríguez-Garavito (Ed.), Legal Strategy in Rights-Based Climate Litigation

9. Allan, B., Lewis, J. I., & Oatley, T. (2021). Green Industrial Policy and the Global Transformation of Climate Politics. Global Environmental Politics, 21(4), 1–19.

10. United States Department of State & United States Executive Office of the President. (2021). The Long-Term Strategy of the United States: Pathways to Net-Zero Greenhouse Gas Emissions by 2050. Washington, DC: Global Publishing Solutions

11. Campbell, K. (2021). Measuring corporate reputation based on shareholder value.

Data Availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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Volume Title
Proceedings of the 3rd International Conference on Business and Policy Studies
ISBN (Print)
978-1-83558-265-7
ISBN (Online)
978-1-83558-266-4
Published Date
05 January 2024
Series
Advances in Economics, Management and Political Sciences
ISSN (Print)
2754-1169
ISSN (Online)
2754-1177
DOI
10.54254/2754-1169/67/20241270
Copyright
05 January 2024
Open Access
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

Copyright © 2023 EWA Publishing. Unless Otherwise Stated