University of Groningen
Falling for Rising Temperatures?
Trinks, Arjan
DOI:
10.33612/diss.118608275
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Publication date:
2020
Link to publication in University of Groningen/UMCG research database
Citation for published version (APA):
Trinks, A. (2020). Falling for Rising Temperatures? finance in a carbon-constrained world. University of
Groningen, SOM research school. https://doi.org/10.33612/diss.118608275
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Falling for Rising Temperatures?
Finance in a carbon-constrained world
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Publisher: University of Groningen Groningen, The Netherlands Printer: Ipskamp Printing
Enschede, The Netherlands ISBN: 978-94-034-2444-6
978-94-034-2443-9 (e-book)
© Arjan Trinks
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system of any nature, or transmitted in any form or by any means, electronic, mechanical, now known or hereafter invented, including photocopying or recording, without prior written permission of the publisher.
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Falling for Rising Temperatures?
Finance in a carbon-constrained world
PhD thesis
to obtain the degree of PhD at the University of Groningen
on the authority of the Rector Magnificus Prof. C. Wijmenga
and in accordance with the decision by the College of Deans. This thesis will be defended in public on
Monday 11 May 2020 at 14:30 hours
by
Pieter Jan Trinks
born on 11 May 1990 in Leeuwarden
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Supervisors Prof. M. Mulder Prof. L.J.R. Scholtens Assessment Committee Prof. C.L.M. Hermes Prof. O. Weber
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Acknowledgments
The last four years have been exciting. Apart from getting married to the love of my life, I got the opportunity to pursue a PhD project which interested me deeply. I am very grateful for this opportunity and all the support I received from colleagues, friends, and family. In the following, I would like to thank a couple of people in particular.
First of all, I thank my supervisors, Machiel Mulder and Bert Scholtens, for their invaluable support. Your passion for the field was highly contagious. I very much enjoyed our meetings, which regularly featured intense discussions and a good dose of humor. Along the way, you were very engaging and did not stop throwing challenging in-depth and conceptual questions at me. You taught me to develop new ideas and to shelve bad ones. It is largely because of you, Machiel and Bert, that the past years seem to have flown by.
I am grateful for the opportunity to visit the University of Edinburgh Business School (UEBS) from January to May 2017. Special thanks go to Gbenga Ibikunle. GB, you were very supportive and kind, as well as genuinely inspiring to work with. I also thank all the PhD candidates and staff at UEBS for making the visit a truly memorable experience.
I am further indebted to my colleagues at the Faculty of Economics and Business (FEB) and the Centre for Energy Economics Research (CEER). You all contributed to a highly inspiring and enjoyable research environment. I especially thank Halit Gonenc for our pleasant collaboration in teaching and Lammertjan Dam for being a great co-author. A big thanks to my office mates Steffen Eriksen, Kenan Qiao, David Peng, and Tobias Grohmann. Steffen and Kenan, I will not forget the bad jokes and the sporadic moments of success enjoyed when beating you at table football. Also, you both taught me a lot. David and Tobias, thanks for the enjoyable conversations (sometimes in Dutch), your support, and the delicious and healthy nuts. Shan Ahmad, Ambrogio Dalò, Hermien Dijk, Jan Eise Fokkema, Fred Giesenow, Daan Hulshof, Nick Koning, Bert Kramer, Mart van Megen, Jos Offerein, Peter Perey, Anouk Schippers, Daniel Vullings, Rasmus Wiese, and Juliette de Wit, your company made the sometimes stressful work much more bearable and all the more worthwhile.
My thanks go out to SOM Research Institute for always being helpful and supportive. I am grateful to all the academics I had the opportunity to get in touch with at the following places: Norwegian School of Economics, Bergen, Norway (IAEE, June 2016); University of
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Acknowledgments
Edinburgh Business School, UK (internal seminars, April–May 2017); University of Zurich, Switzerland (Oikos Finance Academy, September 2017); Ca' Foscari University of Venice, Italy (selected exchange, January 2018); Cass Business School, London, UK (conference on “Asset Management with Climate Risk”, on invitation, January 2018); IPAG Business School, Paris, France (ISEFI, May 2018 and May 2019), University of Groningen, The Netherlands (IAEE, June 2018, and internal seminars 2016–2019); Maastricht University, The Netherlands (GRASFI, September 2018); Vrije Universiteit Amsterdam, The Netherlands (seminar, February 2019); University of Oxford, UK (GRASFI, September 2019); and AG2R La Mondiale, Paris, France (FIR-PRI award ceremony, October 2019).
I thank the members of the assessment committee, Niels Hermes, Olaf Weber, and Cees Withagen, for their time and valuable comments.
I owe a debt of gratitude to my family and non-work friends. You have been a continuous source of joy and care. I am grateful for the support of my paranymphs, David Holwerda and Pieter van Delden. David, thanks for being a five-star B&B host.
Finally, special thanks go out to Emmy; your crazy love puts all things in perspective.
Arjan Trinks
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Contents
Chapter 1 Introduction 1
Chapter 2 Fossil Fuel Divestment and Portfolio Performance 11
Chapter 3 Carbon Intensity and the Cost of Equity Capital 39
Chapter 4 An Efficiency Perspective on Carbon Emissions and Financial Performance
77
Chapter 5 Use of Internal Carbon Pricing Practices as Response to Expected Carbon Constraints
119
Chapter 6 Conclusion and Discussion 153
References 159
Summary 179
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