It is relatively common to see history of policies as a gradual push for the better. A line that begins with no actions taken in the policy realm and ends when the solution has been found by elected officials capable of understanding the problem fully. Environmental policies may follow the same trajectory in our minds, beginning with the flower children of the 60’s and gradually progressing towards a greener future.
Unsurprisingly, this is not the case. The world of policies is better represented by an endless back and forth on policies of all kinds, and environmental policies are no exception. While these ebbs and flows might be the norm in politics, they are not a sign of safety for investors.
Indeed, investments in environmental projects are, at least in part, affected by policies and regulations within the field. In our latest podcast episode of “Research in Progress” we enter this crucial topic along with PhD candidate Laura Minu Nowzohour.
“Given the urgency of climate action, environmental policy uncertainty is a major obstacle to a rapid and timely transition to a low carbon economy. Firms typically want to know which policy assumptions will be valid for their projects over the next decades. And when faced with a policy framework characterized by high uncertainty, they may prefer to postpone or withdraw their investment.” Says Laura Minu Nowzohour.
A PhD candidate in international economics, Laura has been conducting research on this topic for some time now. She is, in fact, an instrumental part of Joelle Noilly’s team and the CIES’ in general. Together they research these important issues concerning the environment. Offering young researchers, the opportunity to contribute on topics that are sure to impact the planet and our lives.
Laura points out this very same urgency in the podcast.
“A shock in environmental policy uncertainty leads to reduced clean energy venture capital deals at the aggregate level and higher volatility of the main clean energy exchange rated fund.”