The Impact of Transitory Climate Risk on Firm Valuation and Financial Institutions: A Stress Test Approach
Alexander Schult,
Sebastian Müller,
Gunther Friedl
et al.
Abstract:Addressing recent calls by European regulatory and supervisory authorities, we develop a new bottom-up climate risk assessment method to examine the resilience of the European banking industry regarding transitory climate risks. We illustrate our approach by estimating the impact of a 50–100 EUR carbon tax per $$\textit{tCO}_{2}$$
tCO
2
equivalent on the valuation and default risk of S… Show more
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