The Economic Geography of Fossil Fuel Divestment, Environmental Policies and Oil and Gas Financing
29 Pages Posted: 7 May 2019
Date Written: April 22, 2019
This paper explores how fossil fuel divestment commitments and environmental policies have shaped the geography of capital flows into the oil and gas sector, based on the analysis of syndicated lending, equity and bond underwriting across 33 countries from 2000 to 2015. We find that the value of total assets pledged for divestment in a given country is negatively associated with capital flows to domestic oil and gas companies, particularly when divestment is led by regional or sovereign governments. Amongst environmental policy instruments, emissions trading schemes and renewables feed-in tariffs have been most impactful in reducing oil and gas sector capital inflows.
Keywords: fossil fuel divestment, oil and gas finance, environmental policies, environmental finance
JEL Classification: G20, G30, Q28, Q32, Q38, Q50
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