The cost of market capital for funding investment projects is higher for oil and gas companies, which mainly reflects the increasing wedge in the cost of equity. Research has shown that equity market  investors are more concerned about climate-related risks compared with investors in debt markets and tend to push carbon intensive industries towards using greener technologies. De Haas, R. and Popov, A.
(2019), "Finance and carbon emissions," Working Paper Series, No 2318, ECB, September. Despite the higher profitability of the fossil fuel energy sector at the current juncture, the IEA notes that high levels of policy uncertainty, difficulties to secure financing and a general reluctance to commit large amounts of capital limit the responsiveness of fossil fuel investment to higher prices.