The 296th Wenlan Financial Forum

Abstract：

Biodiversity loss as a global concern requires dramatic shifts in conservation efforts that carry substantial costs. We offer an initial investigation into how the financial market prices such conservation costs, exploiting the“Green Shield Action”(GSA) —— a regulatory change aimed at preserving biodiversity in national nature reserves in China —— as an exogenous shock to local public financing. We document that GSA, while improving biodiversity, augments the yields of municipal corporate bonds by around 25 basis points. The effects are more pronounced for bonds with shorter maturities and for local governments in weak fiscal positions. The increased cost of public capital can be largely attributed to transition pressure resulting from pre-existing economic activities within reserves and the growth in local public spending on biodiversity following the reform. Investors show little consideration towards endeavors counteracting biodiversity loss beyond financial payoffs. Our findings also provide insights concerning investor education and policy interventions for addressing the financing gap for biodiversity conservation. 

Speaker Introduction：

Gao Haoyu is a professor in the School of Finance at Renmin University of China, a doctoral supervisor, the deputy director of the Monetary and Finance Department, the recipient of the National Science Foundation for Distinguished Young Scholars, the specially appointed professor of Wu Yuzhang of Renmin University of China, and an inductee of the 5th “Young Talent Support Program” of the China Association for Science and Technology. He obtained his Ph.D. degree from the Institute of Mathematics and Systems Science of the Chinese Academy of Sciences and City University of Hong Kong. His research focuses on banks and financial intermediaries, financial risk management, debt and credit markets, corporate finance, and China’s capital market. His representative academic achievements have been published or accepted for publication in authoritative journals in the field of financial management at home and abroad, including The Journal of Finance (JF), The Review of Financial Studies (RFS), Journal of Financial Economics (JFE), Journal of Financial and Quantitative Analysis (JFQA), "Management World", "Journal of Financial Research", "Journal of Management Sciences in China", "The Journal of World Economy", "Systems Engineering - Theory & Practice", and "China Economic Quarterly". He has completed a national natural science foundation youth project (with excellent post-evaluation) and presided over a national natural science foundation general project.