Climate and Environmental Policy Risk and Debt (with Ulf Moslener)
| Available on SSRN |
This paper analyses the role of climate and environmental policies for the impact of firms' carbon emissions and environmental pollution on credit risk and bond pricing. Using corporate bond spreads, we find that carbon premiums increase with climate policy stringency. A higher expected stringency of future climate policies further increases the effect of carbon emissions on bond spreads. Analysing firm credit risk ratings yields similar results. We then extend the scope to firms' environmental pollution in general and find that the impact of different types of pollution on both credit risks and bond spreads increases with environmental policy stringency.
The paper received the Best Paper Award - Sustainability at the 5th Conference on Behavioral Research in Finance, Governance and Accounting (2023).
Environmental Conditions and the Impact of Somatic Capital on the Neolithic Transition (with Lothar Grall, Christian Haas, and Jürgen Meckl)
| Available on SSRN |
The shift from foraging to agriculture, the Neolithic transition, is a key episode in human history with long-term effects on comparative development. This paper proposes somatic capital as a hitherto neglected factor impacting the timing of the Neolithic transition. We develop an evolutionary growth theory that builds on the trade-off between offspring quantity and quality. Based on insights from (evolutionary) biology and anthropology, the theory suggests that variable environmental conditions altered evolutionary optimal allocation of hunter-gatherers' resources from offspring quantity to offspring quality. Higher somatic capital increases the innovation capability of individuals and ultimately facilitates the adoption of agricultural practices. We test the model's prediction using a novel cross-archaeological site dataset covering early Neolithic settlements in Europe, Asia, and northern Africa. By exploiting historical variation in environmental conditions as an instrument for the somatic capital of hunter-gatherer societies, we find evidence for a causal effect of somatic capital on the timing of the transition to agriculture. Our findings complement existing theories on determinants of the Neolithic transition. Next to favourable prerequisites for the Neolithic transition, such as geographic and biogeographic conditions, physical and cognitive abilities seemed to be crucial for human societies to successfully adopt agricultural practices.
Effects of physical climate risks on firms in the agricultural sector (with Mathilde Bossut)
Flood Impacts and Recovery Strategies of Manufacturing Firms (with Mathilde Bossut)
Climate stress testing (with Christian Haas, Ulf Moslener, Sebastian Rink)
Firm transition and financial risks (with Christian Haas)