Pricing Climate Risk

On the latest episode of the Debtwire Municipals Muni Lowdown podcast, Managing Editor Paul Greaves and Curation Editor Stephanie Fagnani speak with Senior Research Analyst Dr. Erika Smull of Breckinridge Capital Advisors on pricing climate risk. Dr. Smull initiates the discussion by explaining the concept of “benchmark aware” in the context of municipal bond investment strategies. The conversation shifts to the resiliency of the municipal market in the face of catastrophic weather events and the availability of quality information to make climate risk assessments. Dr. Smull transitions to the role supply and credit quality, as well as whether private insurance and federal disaster aid will remain as readily available moving forward. Dr. Smull discusses the current state of climate risk disclosure. The discussion turns to an example of “climate induced stress” in detailing the events of Clyde, TX. The podcast closes with Dr. Smull discussing whether the market is getting closer to a climate risk premium and how Breckinridge assesses climate risk. #climaterisk #muniland #pricingrisk #riskpremium #catastrophicevents