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.



June 14, 2021


Emanuele Campiglio and Frederick van der Ploeg


Working Paper

Reading time

1 minute


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.


Emanuele Campiglio

University of Bologna; RFF-CMCC European Institute on Economics and the Environment

Frederick van der Ploeg

University of Oxford; University of Amsterdam

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