The impacts of dual carbon goals on asset prices in China

In this paper, we study the impacts of dual carbon goals on asset prices in China. Using the speech of President Jinping Xi on 22 September 2020 as an event in which the dual carbon goals are formally announced, we find that stocks with green concept have superior performance in the post-event window relative to non-green stocks. In particular, a portfolio that longs green stocks and shorts non-green stocks can generate an average monthly return above 3%. The official announcement of dual carbon goals not only attracts attention of investors, resulting in higher institutional ownership and trading volume for green stocks, but also improves fundamentals for green stocks in the post-event window.