Measuring the impact of the 2009 COP15 Copenhagen Summit - An event study of coal and solar portfolios in the United States of America and China

Sammanfattning: One of the biggest challenges currently facing mankind is tackling the challenge of climate change. To mitigate this, there have been several multilateral conferences, where some steps have been taken. The Copenhagen Summit in 2009 was one such conference, where the expectations before the conference were significant. Unfortunately, the conference was later described to be a failure. This paper uses an event-study methodology to analyse the effect of this unexpected event. Portfolios of companies in the coal and solar industries, listed in the United States of America and China, are used. The results show that the conference did not have any discernible effect on the coal and solar industries in either of the analysed markets. A significant effect was found for Chinese Solar, but the economic reasoning behind this change is unsatisfactory. There were many events that together thwarted the ability of the conference to get to an agreement. Any one event during or before the conference is not likely to have been the direct cause of the observed outcome. The inability of this study to unambiguously find evidence of the coal and solar industries being affected by the outcome of the conference can perhaps be explained by climate change being a natural part of everyday life today. The efforts of top-level politicians might not have a direct impact on the day-to-day valuation of industries.