Macro-Financial Transition Risks in the Fight Against Global Warming
A survey of the academic and policy literature studying the macroeconomic and financial risks of a low-carbon transition.
The macro-financial transition risks that result from disorderly transitions to a carbon-free or low-carbon economy may entail significant costs due to the risk of stranded assets, defaults, collapse in stock market value, both for financial firms and non-financial firms. The effects of networks, contagion, and higher-round effects of stranding may exacerbate the problem. But green monetary and prudential policy and governance reforms may mitigate the problem. The qualitative, empirical, modelling, policy and institutional research on this topic is surveyed and various avenues for future research are identified.
University of Bologna; RFF-CMCC European Institute on Economics and the Environment
Frederick van der Ploeg
University of Oxford; University of Amsterdam
Explainer — Aug 8, 2022
Climate Finance 101
An introduction to climate-focused financial investments, investor motivations and actions, and the challenges of and options for effective climate finance.
On the Issues — Jul 22, 2022
On the Issues: Carbon Offsets, Sweet and Sour Oils, and More
A biweekly newsletter connecting global current events, pressing climate and energy policy news, and economics research from RFF scholars. This week: carbon offsets, sweet and sour oils, and more.
Common Resources — Jul 13, 2022
The Role of Voluntary Carbon Markets in Achieving Net-Zero Goals
Private-sector firms have shown an increasing interest in offsets to help mitigate their carbon footprints. Voluntary carbon markets can provide the outlet firms need, but the success of these markets will depend on how some open questions get resolved.