How stocks judge COPs: market impacts of climate conferences

Abstract

This study investigates the impact of Conference of the Parties (COP) meetings on the stock prices of oil companies and the broader implications for renewable energy sectors to examine the relationship between international climate negotiations and market responses in the energy sector. The analysis focuses on stock price movements and volatility within the oil and renewable energy industries. We look at the data of the 10 largest stocks in each category and investigate their behaviour during COP. The findings indicate that, with the exception of notable negative stock price movements during COPs 20 and 21 (before and during the signing of the Paris Agreement), COP meetings generally do not significantly influence the value of oil companies. There is also no impact on oil prices during COP itself, though some sign of disturbance in the period immediately afterwards. The study also addresses the renewable energy sector, finding no strong effects from most COP meetings but a notable decrease in stocks during COP6's failure. We conclude that the majority of COPs have not produced market signals indicating a green transition, although these signals are potentially detectable.