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Policy Shocks and Contract Renegotiation: Who Gets Raked Over the Coals?

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  • Lange, Ian
  • Kosnik, Lea

Abstract

Changes in climate policy have large influence on businesses. Firms anticipate and respond to such changes, but what if they have already engaged in a longterm relationship with other firms or customers at the time of policy change? For example, coal supply to power stations is typically based on long-term contracts, while the nature of the buyer-supplier relationship may well be affected substantially by climate regulations. However, there has been little evidence on whether or how firms amend their contractual agreements in response to a change in policy.

Suggested Citation

  • Lange, Ian & Kosnik, Lea, 2009. "Policy Shocks and Contract Renegotiation: Who Gets Raked Over the Coals?," SIRE Focus Papers 2009-06, Scottish Institute for Research in Economics (SIRE).
    • Handle: RePEc:edn:sirfps:299
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    File URL: http://repo.sire.ac.uk/handle/10943/299
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