Abstract/Summary

Our thesis consists of three studies. Our first study focused on the impact of water pollution and municipal bonds issued by county authorities in the United States. Using the Toxic Release Inventory database, we used a measurement of toxicity and environmental impact to quantify the yearly level of pollution and found a correlation between the quantity, impact and toxicity of the chemicals and the yield of the bond issuances. To demonstrate causality, we used difference in difference around local green chemistry laws. Our second study focused on chemical accidents. To our knowledge, this is the first study investigating the impact of chemical accidents and leaks on cities. Using the toxicity and environmental impact figures developed earlier, we studied how accidents in industrial facilities could increase the yield of city-level municipal bonds issuances. We also analysed the impact of medical monitoring laws on the distribution of risk between the public and private sectors and found that cities within medical monitoring states tend to suffer a smaller impact to their yield when accidents occur. We also found that these medical monitoring laws transfer the risk of accidents to the corporate bond issues of the owners and operators of the facilities where the accidents occur. Our third study focused on what entrepreneurs can do to reduce pollution. We investigated the relationship between green start-ups and air pollution, by creating a global dataset of start-ups and cities. We then examined how these start-ups impacted air quality and found that the cumulative number of green start-ups drove down the number of PM2.5. We also performed a sub-sectoral analysis to identify which start-ups had the greatest impact on reducing air pollution. We found that green start-ups do reduce the level of air-pollution in urban centres, especially those related to material science and green energy.