Measuring and assessing the effects of climate policy uncertainty / Clara Berestycki, Stefano Carattini, Antoine Dechezlepretre et al. (OECD)

This study proposes a new indicator of Climate Policy Uncertainty based on newspaper coverage frequency. The indicator currently includes 12 OECD Member Countries and covers the period 1990-2018. The index spikes near major political events and during major discussions around potentially significant climate policy changes. Using a global firm-level dataset, the empirical analysis shows that Climate Policy Uncertainty is associated with economically and statistically significant decreases in investment, particularly in pollution-intensive sectors that are most exposed to climate policies, and among capital intensive companies. In addition to annual series, the study also provides the indicator at higher frequencies of monthly and quarterly levels, and develops sub-indices that capture the direction of climate policy uncertainty associated with a strengthening or a weakening of climate policies for a sub-set of countries. [abstract] Author: Clara Berestycki,, Stefano Carattini, Antoine Dechezleprêtre, and Tobias Kruse OECD Economics Department Working Papers No. 1724 Bibliography : p. 41-45