The transition from high- to lower-carbon production systems increasingly creates regulatory and market risks for high-emitting firms. We test to which extent financial investors demand a premium to compensate for such risks and thus might raise firms' cost of equity capital (CoE). Using data...

Electricity markets may become more sensitive to weather conditions because of a higher penetration of renewable energy sources and climatic changes. We investigate whether weather conditions had a growing influence on the average daily day-ahead price in the Dutch electricity market in the...

Fossil fuel divestment campaigns urge investors to sell their stakes in companies that supply coal, oil, and gas. However, avoiding investments in such companies can be expected to impose a financial cost on the investor because of reduced opportunities for portfolio diversification. We compare...