PhD Defence: Maximilian Fuchs
In order to obtain the PhD degree, Maximilian Fuchs has submitted his thesis entitled:
Essays in Climate Finance and Carbon Markets
The first chapter, ``Carbon VIX: Carbon Price Uncertainty and Decarbonization Investments'',presents a market-based high-frequency measure of carbon price uncertainty: the Carbon VIX.Carbon price uncertainty is high and spikes around important climate policy events. We then study the effect of carbon price uncertainty on decarbonization investments via stock returns of ``carbon solution providers'' --- firms that help other firms decarbonize. We find carbon price uncertainty reduces firms' decarbonization investments, similar in magnitude as the effect of declines in carbon prices.
The second chapter, ``Carbon Permit Holdings'', studies firms' holdings of carbon permits in the EU Emission Trading System. I find evidence that many firms hold large quantities of emission permits in excess of their emission levels to hedge future shocks to carbon prices. Firms with excess holdings (i) trade less, (ii) sell morepermits when carbon price uncertainty is low, and (iii) show smaller reductions in future emissions. These patterns provide empirical support for models of firms’ permit trading and decarbonization behavior under risk aversion and help to explain limited trading participation and excess cost of decarbonization.
The third chapter, ``Polluters are Short-Lived: Climate Risk and the Timing of Cash Flows'', establishes a link between firms' timing of cash flows and their carbon emissions. Firms that produce their cash flows in the near-term emit, emit more carbon, consistent with an expectation of increasingly tighter climate policies. I disentangle return premia and find differences in returns stem from changes in emissions instead of cash flow duration and disappear after controlling for investors' climate concerns.
The thesis will be available from research.cbs.dk
Primary Supervisor:
Professor Claus Munk
Department of Finance
Copenhagen Business School
Secondary Supervisors:
Professor Jesper Rangvid
Department of Finance
Copenhagen Business School
Assessment Committee:
Associate Professor Rama Seth (Chair)
Department of Finance
Copenhagen Business School
Professor Zacharias Sautner
Department of Finance
University of Zurich
Associate Professor Christian Thomann
Department of Industrial Economics and Management
KTH Royal Institute of Technology
Date: 21 October 2025
Time: 10:00-12:00
Online: TEAMS
*Please note that the microphone and camera of all spectators must be turned off.
Location: Solbjerg Plads
Room: SPs03 North Consulting
Reception: FUHU (3rd floor above the canteen)
*The CBS PhD School will host a reception, which will take place immediately after the defence.