Conference Agenda

In this paper, we investigate how political shocks affect asset ownership in the global power sector. Therefore, we gather a unique dataset on 2 million global power plant-year observations including ownership information over time. In a difference-in-differences setting on the power plant level, we leverage the highly surprising first presidential election of Donald Trump as a quasi-exogenous change of the political orientation in the U.S. We find that foreign investors are more likely to sell brown US power plants to home-investors compared to a control group of global power plants. The effect is sizeable: the likelihood of this asset transaction increases by more than 8 percentage point for a given power plant, relative to the control group. Conversely, home investors buy less green US power

plants after the election shock, while foreign investors from liberal countries increase green power plant purchases. We explain our results by the interplay between the political distance of different investor groups to the new US ideology, as well as the transition risk of the power plants.

Currently proven oil reserves are largely excessive from a climate standpoint, raising concerns about the potential financial mispricing of carbon assets. This paper studies how large oil companies' financial valuation reflects the size of their economic oil reserves. To this end, we exploit changes in firms' economic oil reserves induced by oil-price variations, and we examine the relation between these reserve changes and firms' stock returns. Economic theory predicts that firm value is convex in the output price when price affects quantities. We exploit this prediction to extend the conventional analysis of firms' financial exposure to changes in the oil price, separating the intensive margin (economic reserves held constant) and the extensive margin (changes in economic reserves). First, we empirically validate that financial market movements are consistent with the extensive margin effect of the oil price. Second, we exploit fundamental reserve data to estimate the economic reserves' sensitivity to the oil price (RSP). Third, we show that our new metric explains a risk premium, accounting for up to half the industry's average cost of capital. This means that the risk associated with more sensitive economic reserves is material to investors who demand compensation from oil companies for the possibility of oil assets' reassessment.

Global climate finance has expanded rapidly, yet cross-border clean-technology investment remains limited and highly concentrated among advanced economies. This paper argues that scaling cross-border clean-technology investment requires not only financial de-risking strategies, but also credible coordination across national climate policies as a complementary pathway to mobilize capital at scale. Building on evidence that regulatory alignment facilitates international trade and capital flows, we conceptualize climate-policy alignment as a two-sided coordination problem in which bilateral investment depends on mutually consistent long-term decarbonization signals. Using a bilateral dataset covering over 500,000 clean-technology investment flows across 195 countries from 2017 to 2022, we examine carbon-tax alignment as an observable form of climate-policy coordination. Employing a staggered event-study design, we find that bilateral clean-tech investment increases by approximately 270% following mutual carbon-tax adoption, with no evidence of anticipatory effects. The gains from alignment are heterogeneous. Effects are larger for peripheral destinations and for country pairs without strong pre-existing ties, such as colonial relationships or a common language, suggesting that policy alignment can substitute for traditional channels of bilateral integration. Moreover, the presence of multilateral development banks (MDBs) significantly amplifies the investment response, indicating strong complementarity between policy de-risking and financial de-risking instruments.

This paper studies how formula apportionment (FA) and firm characteristics shape the local business tax revenues that municipalities in Germany derive from wind turbines. Using turbine-level data, we compute the annual business tax base attributable to each wind turbine for 2000--2020 and estimate the share taxed in the turbine municipality with conditional two-way fixed-effects regressions. We decompose wind-power-related tax bases by operators' headquarters location and legal form, and we exploit two FA reforms in a difference-in-differences design. Under the standard payroll-based FA rule, the allocation of wind-power-related tax bases was driven by operators’ headquarters and thus favors operator municipalities over turbine municipalities. A wind-power-specific modification introduced in 2009 temporarily increased the on-site taxed share of the tax base attributable to turbines operated by off-site firms. A second reform in 2014 restricted eligibility to firms exclusively operating wind turbines and largely reversed these gains. On-site taxation is substantially higher when operators are headquartered locally and when they are organized as partnerships, consistent with heterogeneity in tax-planning opportunities. The results highlight that the fiscal benefits of capital-intensive, low-employment establishments hinge on both operator choices regarding headquarters location and legal form as well as apportionment design, with implications for renewables and other emerging infrastructures.