Climate Change, Demand Uncertainty, and Firms' Investments: Evidence from Planned Power Plants

• 成果类型: Article; Early Access
• 署名作者: Lin, Chen; Schmid, Thomas; Weisbach, Michael s.
• 署名单位: University of Hong Kong; University System of Ohio; Ohio State University; National Bureau of Economic Research
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082; 1540-6261
• DOI: 10.1111/jofi.70071
• 发表日期: 2026-07-23
• 关键词: COMPETITIVE INVESTMENT; capital structure; MARKETS; IMPACT; BEHAVIOR; price; OIL

摘要

How does demand uncertainty affect firms' investment decisions? We examine this question in the context of electricity-producing firms' planned investments in new power plants. We measure uncertainty about future electricity demand using plausibly exogenous variation in temperature projections across scientific climate models. The results show that uncertainty increases investment in power plants with flexible production technologies, while reducing investment in less flexible technologies. Overall, the net effect of uncertainty on investment is positive when firms have access to flexible investment opportunities. These findings are consistent with models in which production flexibility shapes the investment response to demand uncertainty.