lunduniversity.lu.se

Department of Economics

Lund University School of Economics and Management

Seminar in Financial Economics: Christoph Hambel

Seminar

Christoph Hambel, Goethe Universität Frankfurt

Christoph Hambel, Goethe Universität Frankfurt, will present his paper “Asset Diversification versus Climate Action” (joint with Holger Kraft and Frederick van der Ploeg) at the finance seminar. 

Abstract: 

Asset pricing and climate policy are analyzed in a global economy where consumption goods are produced by both a green and a carbon-intensive sector. We allow for two types of damages from global warming. Given that the economy is initially heavily dependent on carbon-intensive capital, the desire to diversify assets complements the attempt to mitigate economic damages from climate change. In the longer run, however, a trade-off between diversification and climate action emerges. We derive the optimal carbon price, the equilibrium risk-free rate, and risk premia. Climate disasters, which are more likely to occur sooner as temperature rises, significantly increase risk premia on financial assets.

 

 
7 December 2021
14:15–15:30

Venue

Ideon Alfa1:4013
Scheelevägen 15B
223 63 Lund

Contact

Thomas Fischer