Emission trading Scheme (ETS) is gaining momentum with its increasing market size and constantly improving information transmission mechanisms. With carbon assets becoming prominent as an alternative asset in investment portfolios, the ETS market has engaged a broad range of participants,...

Before directly addressing the Response to critique and further elaboration (hereafter “Comment”), written by Patrick Bolton and Marcin Kacperczyk (BK), a few thanks are in order. First, we thank the editor, Alex Edmans, both for providing BK the opportunity to directly comment on our paper...

An influential emerging literature, led by Bolton and Kacperczyk (2021a), documents strong correlations between unscaled raw emissions and both stock returns and operating performance. We re-examine that data, using a sample of 2,729 U.S. firms from 2005-2019, and conclude that the associations...