An inconvenient cost: The effects of climate change on municipal bonds

• 成果类型: Article
• 署名作者: Painter, Marcus
• 署名单位: University of Kentucky; Saint Louis University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2019.06.006
• 发表日期: 2020
• 页码: 468-482
• 关键词: climate change; municipal bonds; Sea level rise; investor attention

摘要

Counties more likely to be affected by climate change pay more in underwriting fees and initial yields to issue long-term municipal bonds compared to counties unlikely to be affected by climate change. This difference disappears when comparing short-term municipal bonds, implying the market prices climate change risks for long-term securities only. Higher issuance costs for climate risk counties are driven by bonds with lower credit ratings. Investor attention is a driving factor, as the difference in issuance costs on bonds issued by climate and nonclimate affected counties increases after the release of the 2006 Stern Review on climate change. (C) 2019 Elsevier B.V. All rights reserved.