SEEMS Seminar with Faan Langelaan (ASE, UvA) & Marleen de Jonge (ABS, UvA)
- Date
- 10 March 2025
- Time
- 13:00 -14:00
- Location
- Roeterseilandcampus - building M
- Room
- M4.02
Faan Langelaan (ASE, UvA) - "The effect of management preferences and external prices on ecological resilience in semi-arid grazing systems"
Models of semi-arid grazing systems often assume managers that are either unresponsive to system changes, or that at most respond adaptively. We analyze the impact of management preferences and external prices on the evolution of plant and herbivore populations in a semi-arid grazing system. We demonstrate that transitions between favorable steady states and cyclical behavior are accompanied by significant drops in ecological resilience. Additionally, we disentangle the utility derived from system exploitation from its ecological resilience, identifying the Pareto-optimal combinations that can be achieved. Our results show that as exploitation rents increase, enhancing resilience comes at a higher utility cost. This effect is particularly pronounced in systems that are less vulnerable. This paper contributes to both the resilience literature and the study of bistable grazing systems.
Marleen de Jonge (ABS, UvA) - "The European Carbon Bond premium"
The transition to a low-carbon economy entails large-scale structural shifts in the global economy, which likely come with financial shocks. High carbon-emitting firms are especially exposed to transition risks as policy, legal and technological developments target their greenhouse gas (GHG) emissions. In this project, we find that European companies that are big carbon emitters are paying increasingly high interest rates on the bonds they issue on financial markets. Indeed, investors are asking for an interest rate premium to compensate for the risks that emission-intensive companies are exposed to. We document a positive and significant premium for Scope 1, 2, and 3 carbon emissions that is robust to alternative sample selection criteria and emission variable specifications. A one standard deviation increase in a firm’s Scope 1 and 2 emissions raises yield spreads by 26 basis points. This premium arises from both preference and risk channels, with the component driven by preferences increasing rapidly from 2020 to early 2022. Firms receiving free EU ETS emission allowances face a 40% lower preference premium, highlighting the impact of carbon pricing on the cost of capital. The premium rises monotonically with bond maturity, signaling investor confidence in sustained carbon pricing.
