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This entry pertains to the NYU Stern Summer Climate Finance Conference. I summarize the presentations that I listened to, followed by some general reflections.

Morning Sessions

• Johannes Klausmann (University of Virginia) presented “Do Carbon Markets Undermine Private Climate Initiatives?” (with Pat Akey, Ian Appel, and Aymeric Bellon) which documents how climate commitments by firms within the EU Emissions Trading System (EU ETS) may reduce firm-level emissions but do not reduce aggregate emissions due to what the authors term the “waterbed effect.” The idea is that firms that cut emissions subsequently sell the now-excess carbon allowances into secondary markets, enabling others to pollute more. A point of discussion was whether SBTi commitments reflect real constraints or symbolic gestures to satisfy shareholders, and whether more direct measures of investor pressure are needed to assess the role of engagement.
• Aakash Kalyani (St. Louis Fed) presented “Climate Risk and Housing Market Adaptation: Evidence from Listings” (with Carlos Garriga). The paper constructs a novel, property-level measure of climate adaptation by comparing the textual features of housing listings to FEMA’s guidelines for storm-resistant construction. Using this approach, they classify properties into four categories along two dimensions: whether listings emphasize newer versus older features, and whether they highlight adapted versus non-adapted traits. Throughout the presentation, I kept wondering about how forward-looking expectations about climate risks influence seller disclosures and buyer willingness to pay, a theme that echoed a job market paper I remembered from last year.
• Benedict Guttman-Kenney (Rice University) presented “Disaster Flags: Credit Reporting Relief from Natural Disasters,” which examines whether temporarily masking delinquencies on credit reports following natural disasters can help mitigate long-run financial harm. The core idea is that temporary effects of natural disasters can be come persistent through propagation via credit reports. The paper shows that flags reduce the likelihood of account closures and delinquencies, particularly among borrowers with mid-to-low credit scores, without increasing default risk.
• Eyal Frank (University of Chicago) presented “The Economic Costs of Climate Change from Ecosystem Disruptions: Evidence from Forest Defoliation Outbreaks in the United States,” which explores how climate-induced ecosystem disruptions (specifically forest defoliation) translate into economic costs. The paper uses high-resolution defoliation maps from the U.S. Forest Service spanning 1975 to 2019, which was pretty cool. I thought this was a good example of leveraging micro-data to study macro-relevant climate risks, which has become more popular in the literature.
• Sophie Calder-Wang (University of Pennsylvania) presented “An Anti-IV Approach for Pricing Residential Amenities: Applications to Flood Risk,” which challenges the standard instrumental variables logic often used in valuing residential amenities. The presenter distinguished this “anti-IV” approach from traditional control function methods, treating the observed sorting as signal rather than bias.

Afternoon Sessions

• Emily Gallagher (UC Boulder) presented “Coverage Neglect in Homeowners Insurance” (with Anthony Cookson and Philip Mulder). The presentation began with a helpful taxonomy of why homeowners might be underinsured, ranging from rational behavior such as self-insurance, liquidity constraints, or moral hazard (e.g., shifting losses onto mortgage lenders) to less rational factors like inertia, information gaps, and failure to update policies over time. The data are unusually rich, allowing the authors to observe both coverage levels and realized losses. One point of discussion, especially in connection with Pari Sastry’s earlier presentation, was how best to define and measure underinsurance. The presentation made a strong case for treating coverage adequacy not just as a household choice, but as a market design and policy problem.
• Nadya Malenko (Boston College) presented “Voting on Public Goods: Citizens vs. Shareholders” (with Robin Doettling, Doron Levit, and Magdalena Rola-Janicka). The paper explores how shareholder democracy — with its one share equals one vote — can serve as a second-best mechanism for public good provision when political systems fail to deliver. I thought the paper was a nuanced theoretical take on how corporate governance, income distribution, and democratic legitimacy intersect in the debate on ESG.

Takeaways