TY - BOOK ID - 137199551 TI - Decomposing Climate Risks in Stock Markets AU - Yang, Yuanchen. AU - Huang, Chengyu. AU - Zhang, Yuchen. PY - 2023 SN - 9798400249747 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Macroeconomics KW - Economics: General KW - Environmental Economics KW - Environmental Policy KW - Industries: Energy KW - Finance: General KW - Portfolio Choice KW - Investment Decisions KW - Climate KW - Natural Disasters and Their Management KW - Global Warming KW - Environmental Economics: Government Policy KW - Nonrenewable Resources and Conservation: General KW - Price Level KW - Inflation KW - Deflation KW - General Financial Markets: General (includes Measurement and Data) KW - Economic & financial crises & disasters KW - Economics of specific sectors KW - Climate change KW - Environmental policy & protocols KW - Petroleum, oil & gas industries KW - Finance KW - Environment KW - Climate policy KW - Oil sector KW - Economic sectors KW - Asset prices KW - Prices KW - Currency crises KW - Informal sector KW - Economics KW - Climatic changes KW - Environmental policy KW - Petroleum industry and trade KW - Stock exchanges UR - https://www.unicat.be/uniCat?func=search&query=sysid:137199551 AB - Climate change poses an unprecedented challenge to the world economy and the global financial system. This paper sets out to understand and quantify the impact of climate mitigation, with a focus on climate-related news, which represents an important information source that investors use to revise their subjective assessments of climate risks. Using full-text data from Financial Times from January 2005 to March 2022, we develop machine learning-based indicators to measure risks from climate mitigation, and the direction of the risk is identified through manual labels. The documented risk premium indicates that climate mitigation news has been partially priced in the Canadian stock market. More specifically, stock prices react positively to market-wide climate-favorable news but they do not react negatively to climate-unfavorable news. The results are robust to different model specifications and across equity markets. ER -