The Impact of the Clean Air Act Amendments of 1990 on Electric Utilitiesand Coal Mines: Evidence from the Stock Market

If new environmental regulation imposes significant costs on firms, it should be detected in their stock prices. We use event study methodology to analyze whether President George H. Bush’s Clean Air Act Amendment (CAAA) proposals of June 1989, which were quite different from what had been expected, depressed stock prices in affected electricity generating and coal mining companies. We find that shares of 35 electric generating companies owning Phase I power plants did not noticeably fall in value after the Bush June 1989 announcement, nor after three other possibly relevant events during the preceding year. In fact, these shares increased in value during June and July of 1989. In contrast, stock prices of 11 of the 12 coal mining companies fell after Bush announced his proposals, while stock prices of a large majority of these coal companies fell after two of the other three events (although significance levels make these results not entirely conclusive). We argue that expected profits of electric generating companies did not fall because the regulated price of electricity was typically allowed to increase with costs. In the electricity industry, the costs of the CAAA were expected to be borne entirely by consumers in the form of higher prices.clean air, electric

A Novel Distributed Representation of News (DRNews) for Stock Market Predictions

In this study, a novel Distributed Representation of News (DRNews) model is developed and applied in deep learning-based stock market predictions. With the merit of integrating contextual information and cross-documental knowledge, the DRNews model creates news vectors that describe both the semantic information and potential linkages among news events through an attributed news network. Two stock market prediction tasks, namely the short-term stock movement prediction and stock crises early warning, are implemented in the framework of the attention-based Long Short Term-Memory (LSTM) network. It is suggested that DRNews substantially enhances the results of both tasks comparing with five baselines of news embedding models. Further, the attention mechanism suggests that short-term stock trend and stock market crises both receive influences from daily news with the former demonstrates more critical responses on the information related to the stock market {\em per se}, whilst the latter draws more concerns on the banking sector and economic policies.Comment: 25 page

Oil price shocks and stock market returns: New evidence from the United States and China

This study examines the time-varying correlations between oil prices shocks of different types (supply-side, aggregate demand and oil-market specific demand as per Kilian (2009) who highlighted that "Not all oil shocks are alike") and stock market returns, using a Scalar-BEKK model. For this study we consider the aggregate stock market indices from two countries, China and the US, reflecting the most important developing and developed financial markets in the world. In addition to the whole market, we also consider correlations from key selected industrial sectors, namely Metals & Mining, Oil & Gas, Retail, Technology and Banking. The sample period runs from 1995 until 2013. We highlight several key points: (i) correlations between oil price shocks and stock returns are clearly and systematically time-varying; (ii) oil shocks of different types show substantial variation in their impact upon stock market returns; (iii) these effects differ widely across industrial sectors; and finally (iv) China is seemingly more resilient to oil price shocks than the US

A Just Transition: Why Transitioning Workers into a New Clean Energy Economy Should Be at the Center of Climate Change Policies

With a hostile federal administration, states must take up the fight against climate change. Shortly after the United States withdrew from the Paris Climate Accord, governors from several states announced efforts to meet the targets. This article argues that state level climate actions must consider the economic consequences of climate policy. A shift away from fossil fuels is a fundamentally necessary step in the fight against climate change. However, the economic impact of this shift will be felt most acutely by fossil fuel workers and communities, many of which are already facing economic hardships. Attention and resources must be focused on helping these workers and communities adapt to clean energy in a way that is fair and just, otherwise known as just transition. By failing to address the economic impact of moving away from fossil fuels, climate change will become a driver of inequality. Looking at examples in the United States and Germany, this article presents three elements necessary for a just transition program: dedicated funding streams, strong public sector role, and partnership with non-governmental organizations and unions. This article looks at New York State’s recently announced Clean Climate Careers Initiative and analyzes it through the proposed just transition framework

News Media as a Channel of Environmental Information Disclosure: Evidence from an EGARCH Approach

This paper incorporates EGARCH modeling in a financial event study relating firm value to negative environmental news. News media provide informal information channels unlike formal government disclosure programs. This paper improves on previous studies by using a larger sample than most studies, treating heteroskedasticity in the disturbance term with a hybrid method that allows EGARCH, and comparing stock market reactions across industries and event types. Both standard and hybrid methods reveal reductions in firms’ stock market valuations by on average 1.2% in response to negative environmental events. Significant negative market reactions to environmental news arise for all industry groups and event types analyzed. Accidents and complaints yield 2.0% mean reductions in stock market value, versus later lawsuits and court decisions with 1.5% and 0.8% reductions respectively. Firms in traditional polluting industries are most affected. These stock market impacts suggest that informal environmental information channels may financially incentivize firms’ self-regulation.

The political economy of decarbonisation: exploring the dynamics of South Africa’s electricity sector

South Africa’s coal-dominated electricity sector, a key feature of the country’s minerals-energy complex, is in crisis and subject to change. This offers potential opportunities for decarbonisation. Despite positive examples of decarbonisation in South Africa’s electricity sector, such as a procurement programme for renewable energy, there are structural path dependencies linked to coal-fired generation and security of supply. Decarbonisation goes far beyond what is technologically or even economically feasible, to encompass a complexity of political, social and economic factors. Meanwhile, decision-making in electricity is highly politicised and lack of transparency and power struggles in the policy sphere pose key challenges. Such power struggles are reflected in national debates over which technologies should be prioritised and the institutional arrangements that should facilitate them

Environmental sustainability conducts and corporate performance in extractive sector

The subject of environmental sustainability transcends geographical zones, it attracts attention at the top-most business, governmental and civil society levels because of its current visible impacts. Despite the growing concern for a sustainable ecosystem, few applied studies have been conducted to establish the relationship between environmental sustainability and corporate performance in the extractive sector (one of the most profitable of all business sectors, yet arguably the worst culprit in environmental degradation). Therefore, this research seeks to explore the relationship between environmental sustainability and corporate performance in the extractive sector. This relationship was investigated using data from 68 companies within the extractive sector in both Europe and the Americas by the technique of multiple linear regression and event studies by one-way ANOVA. Our results show a negative relationship between environmental sustainability and profit while mixed results were obtained for relationship between environmental sustainability and firm value. In the short horizon, there is a positive relationship between environmental sustainability and firm value while a negative result was obtained in a long-horizon. The pattern of the results is most likely due to the unique nature of the sector where the demand for product exceeds supply. There is monopoly power in the form of cartels, and substitutes for the sector’s products (e.g. oil, gas, and cement) are either unavailable or inadequate. Therefore, poor attention to environmental responsibilities may not necessarily affect the profit but impact negatively on corporate value of the companies within the sector in a short-term. However, in the long-term, poor sensitivity to the environment may not be sustainable

CBERN - The First Six Years: Challenges and Achievements

CBERN was created in 2006. Its mandate was to create a network able to address critically, persuasively and visibly the foundational role of ethics in business and economic development. The task facing the network was significant. The field was fractured by suspicion, hostility and lack of communication and trust between and among people and organizations in the private, public, voluntary and academic sectors. Research was siloed in the four different sectors and a variety of academic disciplines and sub disciplines. What is more, the role of business ethics in management education and academic research agendas was modest and relatively insubstantial. The challenge facing CBERN has been to address these challenges and build the foundations for change.A successful proposal for a $2.1 million Strategic Knowledge Clusters grant in 2006. The proposal was supported by approximately$300,000 in private sector financial and in kind commitments.Since its inception, CBERN has received an additional $152,000 in SSHRC grants with Dr. Cragg, CBERN’s Project Director and Principal Investigator, as the lead applicant;$125,000 in Schulich School of Business and York cash contributions; modest additional private sector funding, and significant additional in kind contributions from partners: firms, research centres, voluntary sector organizations, and volunteer interns. CBERN has been a partner on an additional 1,269,000 in SSHRC grants as well as aResearch & Dialogue in Support of Ethical Business Practices &Economic, Environmental and Social Sustainability 2 25 million dollar Canadian International Development Agency (CIDA) grant for the Canadian International Institute for Extractive Industries and Development (CIIEID)