Thanks, Federica!

The US does not have to exploit this advantage. It could exercise strategic restraint and think more long-term. There is little evidence of such thinking in the current Trump Administration. Thus, we see energy dominance as a structural factor that facilitates disruptive foreign policies

For example, the EU is not going to apply reciprocal tariffs to the main products it imports from the US (oil and gas), which puts it at a bargaining disadvantage.

Oil and gas create different types of interdependencies than trade in other goods. Oil importers have a strong interest in global stability, as disturbances in price or access can have large economic and political consequences. Exporters have temptations to leverage their position for concessions.

At that time, the US still had an oil export ban. Now it has become the world's leading oil and gas exporter. Among the five leading US export categories are crude oil, gasoline, and LNG. The trade relationship with the EU is even more dominated by oil and gas.

We draw on an article we wrote for ISQ about a decade ago, which documents that (and why) oil exporters tend to be less cooperative in the international arena. academic.oup.com/isq/article-...

I really hope the new editorial team of the Journal of Politics is able to improve the speed of the process, and I wish them well. I know very well how hard it is but it is essential for academic publishing to do better,

In the meantime, a different paper on climate rulings and stock market valuations has been published that was written after mine but has now been out for over 6 months.

Careerwise, this doesn't affect me. But it would for a more junior person. Moreover, this paper is topical, and I would have liked to affect current debates. It's really hard to write about current events when publication moves this slowly.

On process: The submission and R&R process was smooth, if a little slow. However, this piece was conditionally accepted on February 5, 2024. It took almost 1,5 years to appear on First View online. There were no issues with replication or anything else.

This suggests that investors do update their valuations of the most directly affected firms (e.g. the likely beneficiaries of subsidies or targets of phase outs) but not of firms whose exposure to policy change is less unambiguous.

I find that plaintiff victories have modest but economically significant positive effects on renewable energy stocks and similarly sized negative effects on coal stocks but no significant effect on “green” firms or major oil and gas producers. Plaintiff losses have no significant effect on asset prices.

The idea is that investors may update their beliefs about the likelihood of climate policies that could affect the valuation of firms whose profits are sensitive to such policies.