Abstract

The paper analyzes whether climate change has an effect on renewable stock prices. This is important because as climate change concerns continue to grow, if there is an effect on renewable stock prices, companies and investors can take that into consideration when making financial decisions. The paper looks at monthly average temperature and precipitation data in the United States as a measure of climate change. This data is gathered from the National Centers for Environmental Information (NCEI), which is a part of the National Oceanic and Atmospheric Administration (NOAA). It also looks at the closing stock price data of 20 renewable companies. All financial data is gathered from Yahoo Finance. The paper finds that there is no statistically significant effect of climate change on renewable stock prices. This differs from some other research, likely due to the use of temperature and precipitation as a measure of climate change, unlike other studies that examine corporate policy or major weather events when referencing climate change. The lack of statistically significant results means that investors do not look at the average temperature or average precipitation levels when considering whether or not to invest in renewable stocks. Firms and investors should expect climate change to only affect renewable stock prices when there are major policy or weather events and should not worry about renewable stock prices fluctuating due to temperature or precipitation.

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