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2009-06-24 | project

Impact of Climate Policy and Policy Instruments on Investment on Environment

Scepticism with respect to the consequences of climate change is declining worldwide as this issue takes a prominent place on global political agenda. However, the overall extent and magnitude of climate change consequences are still extremely uncertain. As such, any economic analysis of climate change must take cognisance of the economics of risk and uncertainty.

In this context, this research proposal will assess how investors, government and farmers deal with choices under risk. The overarching theme of this proposal is the Impact of Climate Policy and Economic Policy Instruments on Environmental Investments. Investments in this regard refer to stock market investments, investments in renewable energy and investment in adaptation. Specific research projects will examine the role of fairness and equity preferences in global climate change negotiations; the distribution of domestic mitigation commitments amongst the factors of production; investor uncertainty associated with putting a price on carbon and the role of government in facilitating investment in renewable energy generation – a topic of particular relevance to energy constrained South Africa; investor uncertainty associated with environmentally responsible investment (ERI) and the role of the stock market and associated government policy in driving (ERI); and the role of risk and uncertainty in farmers’ climate change adaptation strategies.