Biodiversity Impacts of Renewable Energy

Haozhou Gong, Chen Lin, Zacharias Sautner and Thomas Schmid
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Haozhou Gong: The University of Hong Kong - Faculty of Business and Economics
Zacharias Sautner: University of Zurich - Department of Finance; Swiss Finance Institute; European Corporate Governance Institute (ECGI)
Thomas Schmid: The University of Hong Kong - Faculty of Business and Economics

No 25-98, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: Renewable energy (RE) is vital for addressing climate change, but the land use of hydro, solar, and wind plants can negatively affect biodiversity through habitat destruction. By combining spatial biodiversity data, satellite imagery, and asset-level information on 40,911 RE plants, we develop a novel measure of RE’s biodiversity impact around the world. We find that solar plants cause the greatest negative impact overall, while hydro plants are located in the most biodiversity-sensitive areas. The biodiversity impact of RE has grown substantially over time, driven by increased land use and siting in more biodiversity-sensitive locations. The top 1% of plants and owners are responsible for the majority of the impact. We use our measure in three corporate finance applications. Publicly-listed and non-financial ownership, as well as balance-sheet financing, are each associated with siting RE projects in higher-impact locations, while private and financial ownership, as well as project finance, align with lower-impact siting choices. These results suggest that ownership structure and financing design translate into systematically different environmental footprints in project siting.

Keywords: Renewable energy; Biodiversity risk; Nature risk (search for similar items in EconPapers)
Pages: 71 pages
Date: 2025-11
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env and nep-res
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2598

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