UC Davis Releases Study On Oil and Gas Investors
A new study out of UC Davis Graduate School of Management suggest that investors in US oil and gas companies have not ignored the science when considering whether the potential carbon asset stock prices constitute a bubble
The study found that investors’ actions and expectations for future cash flows are based on all possible scenarios, not just the negative ones reported in the media. The study, titled “Science and the Stock Market: Investors’ Recognition of Unburnable Carbon,” gives market evidence that strikes down claims that a carbon bubble about to burst.
Two of the study’s co-authors are Paul A. Griffin, a professor of management, and Amy Myers Jaffe, executive director of energy and sustainability, both of the UC Davis Graduate School of Management.
“It’s essential that the media interpret accurately the meaning of results from science, but that does not seem to have happened with media reports about unburnable carbon,” said Griffin, an international authority in accounting and corporate disclosure. “Our study tries to set the record straight.”
The study took a close look at the stocks of the 63 largest US oil and gas companies that trade on the major US exchanges. These companies disclosed substantial information on the oil and gas reserves in their financial statements, making it likely that these companies’ stock prices might be affected by investors’ perceptions about the consequences of unburnable carbon.
Jaffe, a global expert on energy policy, geopolitical risk, and energy and sustainability, added: “This important energy policy issue needs a full debate and additional analysis, so that pension funds do not simply dump their oil and gas
You can read the complete findings of the study here.
