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SUMMARY:The Value of Climate Hedge Assets: Evidence from Australian Water 
 Markets
DTSTART:20231117T114500
DTEND:20231117T130000
DTSTAMP:20260427T230510Z
UID:00a5614dac5d4244d68ec6bd30426d9d8ed972457c8041da7d8d3e5a
CATEGORIES:Conferences - Seminars
DESCRIPTION:Ryan Lewis - University of Colorado Boulder\nIn Australia’s 
 Murray Darling Basin (MDB)\, short term (allocation) and long term (entitl
 ement) water rights are separately traded\, centrally reported\, and disse
 minated to the public. I utilize this setting to demonstrate three primary
  findings concerning water rights and climate change risk. First\, water r
 ights appear to be a climate change hedge: in periods of diminishing suppl
 y\, allocation cash flows spike as price increases offset quantity decline
 s. Second\, since 2014\, entitlement prices in climate exposed areas have 
 increased approximately $1500 per MegaLitre (about 39%) more than prices i
 n non-climate exposed areas while allocation prices are similar in both ar
 eas. These price differences provide a clear market signal about future sc
 arcity and help to define investment opportunities available today to pres
 erve water resources. Finally\, estimating the allocation cash- flow–rai
 nfall elasticity and extrapolating using the 2050 IPCC rainfall scenarios\
 , I attribute about 21% of the price effect to differences in expected cas
 h flow\, and the remainder to a lower discount rate. The premium I estimat
 e equates to a 1.2% lower rate of return for climate hedge or mitigation a
 ssets\, a critical parameter in climate economics.\n 
LOCATION:UniL Campus\, Room Extra 126
STATUS:CONFIRMED
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