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Mr. Serhan Cevik, João Tovar Jalles, and Bert van Selm

), research on how climate change can affect sovereign default risk is absent. In Cevik and Jalles (2020) , we show that climate change vulnerability and resilience have significant effects on government bond yields and spreads, after controlling for conventional macroeconomic factors, especially in developing countries. In this paper, we uncover another layer of empirical information by estimating the impact of climate change on the probability of sovereign default in a group of 116 countries over the period 1995– 2017, taking advantage of a comprehensive dataset on

Mr. Serhan Cevik and João Tovar Jalles
Climate change poses an existential threat to the global economy. While there is a growing body of literature on the economic consequences of climate change, research on the link between climate change and sovereign default risk is nonexistent. We aim to fill this gap in the literature by estimating the impact of climate change vulnerability and resilience on the probability of sovereign debt default. Using a sample of 116 countries over the period 1995–2017, we find that climate change vulnerability and resilience have significant effects on the probability of sovereign debt default, especially among low-income countries. That is, countries with greater vulnerability to climate change face a higher likelihood of debt default compared to more climate resilient countries. These findings remain robust to a battery of sensitivity checks, including alternative measures of sovereign debt default, model specifications, and estimation methodologies.
Mr. Serhan Cevik and Mr. Manuk Ghazanchyan
While the world’s attention is on dealing with the COVID-19 pandemic, climate change remains a greater existential threat to vulnerable countries that are highly dependent on a weather-sensitive sector like tourism. Using a novel multidimensional index, this study investigates the long-term impact of climate change vulnerability on international tourism in a panel of 15 Caribbean countries over the period 1995–2017. Empirical results show that climate vulnerability already has a statistically and economically significant negative effect on international tourism revenues across the region. As extreme weather events are becoming more frequent and severe over time, our findings indicate that the Caribbean countries need to pursue comprehensive adaptation policies to reduce vulnerabilities to climate change.
Mr. Serhan Cevik, Mr. Manuk Ghazanchyan, and Bert van Selm

surface water due to changes in rainfall and increased droughts are significant threats to tourism activity. It is well established in the literature that extreme weather events and natural disasters tend to impair economic activity, especially in developing countries with weaker capacity to mitigate and adapt. In this paper, however, we move beyond the usual dummy variable for natural disasters and utilize a novel multidimensional index developed by the Notre Dame Global Adaptation Institute (ND-GAIN) to measure climate change vulnerability. The main contribution of

Mr. Serhan Cevik, João Tovar Jalles, and Selm Bert van

research on how climate change affects sovereign risks is limited. In Cevik and Jalles (2020a) , we show that climate change vulnerability and resilience have significant effects on government bond yields and spreads, after controlling for conventional macroeconomic factors, especially in developing countries. In Cevik and Jalles (2020b) , we uncover another layer of empirical information by showing the impact of climate change on the probability of sovereign default. In this paper, we focus on how climate change may affect sovereign credit ratings, using a novel