BEGIN:VCALENDAR
VERSION:2.0
PRODID:-//ox.ac.uk//NONSGML oxford.event//EN
X-WR-TIMEZONE:Europe/London
BEGIN:VTIMEZONE
TZID:Europe/London
X-LIC-LOCATION:Europe/London
BEGIN:DAYLIGHT
DTSTART:19700329T010000
RRULE:FREQ=YEARLY;BYDAY=-1SU;BYMONTH=3
TZNAME:BST
TZOFFSETFROM:+0000
TZOFFSETTO:+0100
END:DAYLIGHT
BEGIN:STANDARD
DTSTART:19701025T020000
RRULE:FREQ=YEARLY;BYDAY=-1SU;BYMONTH=10
TZNAME:GMT
TZOFFSETFROM:+0100
TZOFFSETTO:+0000
END:STANDARD
END:VTIMEZONE
BEGIN:VEVENT
SUMMARY:Climate Change\, Adaptation\, and Sovereign Risk
DTSTART;TZID=Europe/London:20260601T150000
DTEND;TZID=Europe/London:20260601T161500
DTSTAMP:20260525T001024Z
UID:7a97d98d-6219-f111-8342-7c1e522d9057
CREATED:20260306T140114Z
DESCRIPTION:Many emerging markets face high borrowing costs and exposure t
 o natural disasters. How will fiscal constraints affect the adaptation to\
 , and therefore the losses from\, climate change in such economies? A sove
 reign default model augmented with natural disasters and endogenous adapta
 tion predicts that i) climate change increases borrowing costs\, ii) adapt
 ation reduces borrowing costs\, and iii) default risk constrains adaptatio
 n. These economies suffer from an ‘adaptation trap’: high borrowing co
 sts restrict adaptation\, leading to higher losses from disasters and high
 er borrowing costs in the future. To test these predictions I construct a 
 novel measure of adaptation using text analysis to identify adaptation exp
 enditures in government budgets. Consistent with the model\, I document a 
 robust positive relationship between sovereign ratings and adaptation as w
 ell as a positive causal effect of cyclone strikes on default risk that is
  attenuated by adaptation. The sovereign risk- adaptation channel is quant
 itatively important in the estimated model. In the Caribbean 10% of GDP lo
 sses from cyclones are due to default risk. This loss increases with clima
 te change but can be mitigated by debt relief policies.
LAST-MODIFIED:20260507T123414Z
LOCATION:Manor Road Building - Seminar Room C\, Seminar Room C Manor Road 
 Building Manor Road Oxford Oxfordshire OX1 3UQ United Kingdom
SPEAKER:Sarah Duffy (University of Oxford)
END:VEVENT
END:VCALENDAR