The Impact of Climate Change on Rural Credit Risks


2:00 PM - 3:00 PM



  • Time: 14:00-15:00 pm   (Beijing Time)
  • Date: Wednesday, May 8, 2024
  • Venue: MB541
  • Speaker:Prof. Junjie Zhang
  • Host:Dr. Yi Hong


Climate change heightens conventional financial risks for the banking system, especially for those commercial banks specializing in rural finance. Taking advantage of a unique dataset with 13 million agriculture loan records from a Chinese bank, we evaluate the impact of climate change on credit quality. We comprehensively evaluate how physical risks, including heat waves, frost, flooding, winds, and drought, can negatively impact rural credit quality. Our preliminary results show that, with one more day of over 35 degrees per year, the amount of overdue principal and interest will increase by 2.02% and 3.49%, respectively. Moreover, we conduct climate pressure testing based on the simulation results of various climate models. The result shows that shifting temperature patterns are the leading force in the default of rural loans.


Junjie Zhang is a professor at the Nicholas School of the Environment, Duke University. He directs the Initiative for Sustainable Investment at Duke Kunshan University, a joint-venture university between Duke University and Wuhan University. He founded and directed Duke Kunshan's Environmental Research Center and International Master of Environmental Policy Program. Before that, he was an associate professor at the School of Global Policy and Strategy at the University of California, San Diego. He was also a Volkswagen Visiting Chair in Sustainability at Schwarzman College, Tsinghua University. His recent research focuses on empirical issues in climate finance, carbon markets, and ESG.

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