The financial consequences of abolishing a carbon trading system

Ramiah, V, Huy, P, Wang, I and Dang, V 2017, 'The financial consequences of abolishing a carbon trading system', Applied Economics Letters, vol. 24, no. 13, pp. 936-939.


Document type: Journal Article
Collection: Journal Articles

Title The financial consequences of abolishing a carbon trading system
Author(s) Ramiah, V
Huy, P
Wang, I
Dang, V
Year 2017
Journal name Applied Economics Letters
Volume number 24
Issue number 13
Start page 936
End page 939
Total pages 4
Publisher Routledge
Abstract We investigate the impact of 61 announcements of environmental regulations on the equities listed on the Australian Stock Exchange over the period 2009-2015. In particular, our study focuses on how the stock market reacts to announcements of the abolishment of carbon trading/pricing system. Using event study methodology, we assess whether these announcements create or destroy wealth of equity investors. Furthermore, we estimate changes in systematic risk following the announcements. In general, we find that the abolishment of the carbon pricing system has a positive effect on 18 sectors and the process of removing the carbon pricing system appears to affect the systematic risk of businesses leading to diamond risk structures. We also document negative reactions of polluting sectors to the announcements of green policies.
Subject Financial Economics
Keyword(s) abnormal return
carbon pricing
diamond risk
Environmental regulation
systematic risk
DOI - identifier 10.1080/13504851.2016.1243201
Copyright notice © 2016 Informa UK Limited, trading as Taylor & Francis Group.
ISSN 1350-4851
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