Carbon Risk in European Equity Returns

Investors perceive climate change and the volatility of asset prices caused by the ongoing low carbon transition of the economy, so-called carbon risk, to have an impact on their portfolio performance. However, the extent of carbon risk's impact on asset prices is still largely unknown. This paper provides a comprehensive quantification of carbon risk in European equity prices and examines whether it constitutes a systematic risk factor. I construct a carbon risk factor to determine the unique share of return attributable to differences in carbon intensity. During the sample period less (more) carbon intensive firms offer higher (lower) returns, which leads to a significant positive return of the carbon risk factor. Moreover, the carbon factor is significantly related to the sample covariance matrix of returns and offers a carbon risk premium in the cross-section of returns. In combination with the enhanced explanatory power relative to standard asset pricing models, this indicates that carbon risk constitutes a systematic risk factor. Consequently, investors can estimate carbon risk exposures based on widely available stock returns and include stocks without explicit carbon emission information in their risk management and investment process. Keywords: Carbon risk; carbon risk factor; factor model; asset pricing.Investors perceive climate change and the volatility of asset prices caused by the ongoing low carbon transition of the economy, so-called carbon risk, to have an impact on their portfolio performance. However, the extent of carbon risk's impact on asset prices is still largely unknown. This paper provides a comprehensive quantification of carbon risk in European equity prices and examines whether it constitutes a systematic risk factor. I construct a carbon risk factor to determine the unique share of return attributable to differences in carbon intensity. During the sample period less (more) carbon intensive firms offer higher (lower) returns, which leads to a significant positive return of the carbon risk factor. Moreover, the carbon factor is significantly related to the sample covariance matrix of returns and offers a carbon risk premium in the cross-section of returns. In combination with the enhanced explanatory power relative to standard asset pricing models, this indicates that carbon risk constitutes a systematic risk factor. Consequently, investors can estimate carbon risk exposures based on widely available stock returns and include stocks without explicit carbon emission information in their risk management and investment process. Keywords: Carbon risk; carbon risk factor; factor model; asset pricing

Windthrow damage in Picea abies is associated with physical and chemical stem wood properties

On 26 December 1999, the windstorm "Lothar” hit large parts of western and central Europe. In Switzerland, windthrow losses reached 12.7Miom3 of timber, corresponding to 2.8 times the annual national timber harvest. Although these exceptional losses were due to extreme peak velocities, recent changes in tree nutrition may have increased forest susceptibility. Previous controlled environment experiments revealed that wood density (associated with wood stiffness) tends to increase in elevated CO2, and to decrease when N-availability is enhanced (e.g., by soluble N-deposition). Such changes in wood quality could theoretically influence the risk of wind damage. We used the "Lothar” windstorm as a "natural experiment” to explore links between damage and wood properties. In 104 windthrow sites across the Swiss Plateau, more than 1,600 wood cores from (1) broken, (2) uprooted and (3) still standing (not damaged) spruce trees (Picea abies) were collected in February and March 2000. Wood properties, treering width and chemistry of the wood samples were analysed. Broken trees showed wider treerings in the decade 1990-99 compared to non-broken trees (either uprooted or undamaged trees). Broken trees also showed lower non-structural carbohydrate (NSC) concentration in sapwood, reflecting active structural carbohydrate sinks associated with fast growth. There was also a trend for higher tissue N-concentrations in broken trees. No significant differences between damage types were found in wood density and wood shrinkage during desiccation. We conclude that stem breakage risk of P. abies is associated with a stimulation of growth in the past decade and with changes in tree nutritional status. However, the risk for windthrow of whole spruce trees (uprooted but not broken) was not related to the studied wood parameter

Spectral Models of Convection-Dominated Accretion Flows

For small values of the dimensionless viscosity parameter, namely $\alpha\lesssim 0.1$, the dynamics of non-radiating accretion flows is dominated by convection; convection strongly suppresses the accretion of matter onto the central object and transports a luminosity $\sim 10^{-3}-10^{-2} \dot M c^2$ from small to large radii in the flow. A fraction of this convective luminosity is likely to be radiated at large radii via thermal bremsstrahlung emission. We show that this leads to a correlation between the frequency of maximal bremsstrahlung emission and the luminosity of the source, $\nu_{\rm peak} \propto L^{2/3}$. Accreting black holes with X-ray luminosities $10^{-4} L_{Edd}\gtrsim L_X(0.5-10{\rm keV}) \gtrsim 10^{-7}L_{Edd}$ are expected to have hard X-ray spectra, with photon indices $\Gamma\sim2$, and sources with $L_X\lesssim 10^{-9}L_{Edd}$ are expected to have soft spectra, with $\Gamma\sim3.5$. This is testable with {\it Chandra} and {\it XMM}.Comment: final version accepted by ApJ; significant modifications from previous versio

The Effect of Silicon Grade and Electrode Architecture on the Performance of Advanced Anodes for Next Generation Lithium-Ion Cells

To increase the specific capacity of anodes for lithium-ion cells, advanced active materials, such as silicon, can be utilized. Silicon has an order of magnitude higher specific capacity compared to the state-of-the-art anode material graphite; therefore, it is a promising candidate to achieve this target. In this study, different types of silicon nanopowders were introduced as active material for the manufacturing of composite silicon/graphite electrodes. The materials were selected from different suppliers providing different grades of purity and different grain sizes. The slurry preparation, including binder, additives, and active material, was established using a ball milling device and coating was performed via tape casting on a thin copper current collector foil. Composite electrodes with an areal capacity of approximately 1.70 mAh/cm² were deposited. Reference electrodes without silicon were prepared in the same manner, and they showed slightly lower areal capacities. High repetition rate, ultrafast laser ablation was applied to these high-power electrodes in order to introduce line structures with a periodicity of 200 µm. The electrochemical performance of the anodes was evaluated as rate capability and operational lifetime measurements including pouch cells with NMC 622 as counter electrodes. For the silicon/graphite composite electrodes with the best performance, up to 200 full cycles at a C-rate of 1C were achieved until end of life was reached at 80% relative capacity. Additionally, electrochemical impedance spectroscopies were conducted as a function of state of health to correlate the used silicon grade with solid electrolyte interface (SEI) formation and charge transfer resistance values

Error control for statistical solutions

Statistical solutions have recently been introduced as a an alternative solution framework for hyperbolic systems of conservation laws. In this work we derive a novel a posteriori error estimate in the Wasserstein distance between dissipative statistical solutions and numerical approximations, which rely on so-called regularized empirical measures. The error estimator can be split into deterministic parts which correspond to spatio-temporal approximation errors and a stochastic part which reflects the stochastic error. We provide numerical experiments which examine the scaling properties of the residuals and verify their splitting.Comment: 25 pages, 2 figure