The Leibniz Institute for Financial Research SAFE and the Centre for Economic Policy Research (CEPR) Research Policy Network (RPN) on European Financial Architecture (EFA), organize and cordially invite you to attend a web seminar on
Climate Policy and the Role of Finance
to be held onlione on 1:00 p.m. - 2:30 p.m. CET, 6 March 2024
A European Climate Bond
Marco Pagano
University of Naples Federico II, CEPR, and EFA RPN Member
with Irene Monasterolo, Antonia Pacelli, and Carmine Russo
Corporate Climate Lobbying
Zacharias Sautner
University of Zurich, Swiss Finance Institute, and EFA RPN Member
with Markus Leippold and Tingyu Yu
Presentations will be followed by a Q&A with the audience.
A European Climate Bond
Irene Monasterolo, Antonia Pacelli, Marco Pagano, and Carmine Russo
Abstract: The European Union faces a large climate investment gap. To fill it, we propose the joint issuance of EU climate bonds. These bonds would be funded by the sale of emission allowances, traded on the EU Emissions Trading System and extended to cover all sectors. Access to the resulting funds would be conditional on countries' performance on the implementation of climate investments. EU climate bonds would meet global demand for a safe and liquid asset, while increasing the speed and efficiency of EU climate investing, its resilience to sovereign crises, and the greening of investors' portfolios and monetary policy.
Corporate Climate Lobbying
Markus Leippold, Zacharias Sautner and Tingyu Yu
Abstract: A common concern is that ambitious climate policy is---at least in parts---obstructed by corporate lobbying activities. We quantify corporate anti- and pro-climate lobbying expenses, identify the largest corporate lobbyists and their motives, establish how climate lobbying relates to corporate business models, and document whether and how climate lobbying is priced in financial markets. Firms spend on average $295,921 per year on anti-climate lobbying ($164,991 on pro-climate lobbying). Recently, firms have tried to camouflage their climate lobbying activities. Large anti-climate lobbyists have more carbon-intensive business models and face more climate-related incidents in the future. Firms that spend more on anti-climate lobbying earn higher returns, probably because of a risk premium. Their stock prices went up when the Waxman-Markey Cap-and-Trade Bill failed, and down when the Inflation Reduction Act was announced.
