Inflation and the Carbon Premium

Inflation and the Carbon Premium | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Article Inflation and the Carbon Premium Marcin Kacperczyk, Patrick Bolton, Tianyu Wang This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-6343083/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This paper explores the link between inflation and the carbon premium of U.S. listed companies. Prior evidence has established that investors demand a return premium for stocks of companies with higher (direct and indirect) carbon emissions. We find new evidence that this carbon premium is higher in the presence of energy price inflation. For values of energy CPI equal to the sample mean, a one-standard deviation change in direct emissions is associated with a 2 percentage-point higher annual return premium, and this return premium increases by 44% when aggregate energy prices are higher by one standard deviation of their in-sample distribution. Scientific community and society/Social sciences/Economics Earth and environmental sciences/Climate sciences/Climate change/Climate-change mitigation Full Text Additional Declarations There is NO Competing Interest. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-6343083","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Article","associatedPublications":[],"authors":[{"id":437729113,"identity":"656165e8-b23d-49a2-b114-d2a0aa49324f","order_by":0,"name":"Marcin Kacperczyk","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAAxElEQVRIiWNgGAWjYDACHijNzwxlSBCtRbKZZC0GB4jVottz+OHngop78sbHmR8w/KhhSJzZQECL2dk2Y+kZZ4oNtx1mM2DsOcaQOJuQLWbnGcyYedsSEswOA53I28CQOI+wFvZvzLz/EhKMm3kYGP8SpeVsD9CWhoQEA2YeBmaQLYQdduZMsfSMYwmGM4B+OSxzTMKYsPfPpG/8XFCTIM/ff/jhwzc1NrIzDhCyBghg8c5wgJiIRNUyCkbBKBgFowArAAC4/TlwzNXGVgAAAABJRU5ErkJggg==","orcid":"","institution":"Imperial College London","correspondingAuthor":true,"prefix":"","firstName":"Marcin","middleName":"","lastName":"Kacperczyk","suffix":""},{"id":437729114,"identity":"9e1e25b5-4962-4a73-8a21-493ff46a14a6","order_by":1,"name":"Patrick Bolton","email":"","orcid":"","institution":"Imperial College London","correspondingAuthor":false,"prefix":"","firstName":"Patrick","middleName":"","lastName":"Bolton","suffix":""},{"id":437729115,"identity":"b7d62b13-eb84-4000-99b8-bd2183cf9573","order_by":2,"name":"Tianyu Wang","email":"","orcid":"","institution":"Tsinghua University","correspondingAuthor":false,"prefix":"","firstName":"Tianyu","middleName":"","lastName":"Wang","suffix":""}],"badges":[],"createdAt":"2025-03-31 08:42:11","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-6343083/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-6343083/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":82037401,"identity":"7a2d988f-ab08-4b56-80a4-52fb3e46ef92","added_by":"auto","created_at":"2025-05-06 08:25:09","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":872988,"visible":true,"origin":"","legend":"Article file","description":"","filename":"inflationncc.pdf","url":"https://assets-eu.researchsquare.com/files/rs-6343083/v1_covered_d3f4684b-c924-4bb3-8fe9-833ff3999838.pdf"}],"financialInterests":"There is \u003cb\u003eNO\u003c/b\u003e Competing Interest.","formattedTitle":"Inflation and the Carbon Premium","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":true,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"","lastPublishedDoi":"10.21203/rs.3.rs-6343083/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-6343083/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"This paper explores the link between inflation and the carbon premium of U.S. listed companies. 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