Debt and damages: What are the chances of staying under the 2<mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML" altimg="si1.gif" overflow="scroll"><mml:mo>°</mml:mo></mml:math>C warming threshold?

Bovari, Emmanuel; Lecuyer, Oskar; Isaac, Florent Mc

doi:10.1016/j.inteco.2018.02.002

Cited by 23 publications

(26 citation statements)

References 22 publications

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“…There are two reasons why we have opted for such a policy mix instead of an isolated carbon tax policy. First, this policy mix can bring about more substantial outcomes in terms of an increase in green investment and carbon emissions reduction (see Dafermos and Nikolaidi, 2019;Bovari et al, 2018b;Bovari et al, 2020). Second, broadly speaking, the distribution of the carbon tax revenues to the economy via green subsidies is politically a much more realistic scenario given the significant distributional effects of a carbon tax policy (for these effects see e.g.…”

Section: Combining Green Differentiated Capital Requirements With Grementioning

confidence: 99%

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How can green differentiated capital requirements affect climate risks? A dynamic macrofinancial analysis

Dafermos

Nikolaidi

2021

Journal of Financial Stability

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Using an ecological macrofinancial model, we explore the potential impact of the 'green supporting factor' (GSF) and the 'dirty penalising factor' (DPF) on climate-related financial risks. We identify the transmission channels by which these green differentiated capital requirements (GDCRs) can affect credit provision and loan spreads, and we analyse these channels within a dynamic framework in which climate and macrofinancial feedback effects play a key role. Our main findings are as follows. First, GDCRs can reduce the pace of global warming and decrease thereby the physical financial risks. This reduction is quantitatively small, but is enhanced when the GSF and the DPF are implemented simultaneously or in combination with green fiscal policies. Second, the DPF reduces banks' credit provision and leverage, making them less fragile. Third, both the DPF and the GSF generate some transition risks: the GSF increases bank leverage because it boosts green credit and the DPF increases loan defaults since it reduces economic activity. These effects are small in quantitative terms and are attenuated when there is a simultaneous implementation of the DPF and the GSF. Fourth, fiscal policies that boost green investment amplify the transition risks of the GSF and reduce the transition risks of the DPF; the combination of green fiscal policy with the DPF is thereby a potentially effective climate policy mix from a financial stability point of view.

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Section: Combining Green Differentiated Capital Requirements With Grementioning

confidence: 99%

“…We have used the US GDP deflator in order to make the adjustment.38 For an SFC model that follows more closely the approach of the standard IAMs, seeBovari et al (2018a),Bovari et al (2018b) andBovari et al (2020). In this model the emissions reduction rate is derived though a cost minimisation problem.…”

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confidence: 99%

How can green differentiated capital requirements affect climate risks? A dynamic macrofinancial analysis

Dafermos

Nikolaidi

2021

Journal of Financial Stability

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“…Up until now, during the crisis, some actions point in the opposite direction of cooperation [8] and others in favor [48]. If the CO2 emissions rebound and get back to its long-run growth trajectory, the chances to accomplish the Paris climate goals will remain meager [49]. More broadly, "the world is not on track to achieve human development-related Sustainable Development Goals by 2030" [50].…”

Section: Resultsmentioning

confidence: 99%

How the COVID-19 Crisis is Showing us the Complexities in the Global Energy Transition

Meza¹,

Amado²,

Sauer³

2020

Preprint

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The measures for tackling the COVID-19 may shrink the global GDP by approximately 6% in 2020, the deepest post-war recession. As a result, the global energy demand declined by 3.8% in the first quarter of 2020. Concerning fossil fuels, this conjuncture reduced the demand drastically and collapsed the prices to historic levels. Despite the general market disruptions, renewable energy sources (RES) seem to be more resilient to the crisis because they are the only sources that will grow in demand in 2020, driven by priority dispatch. The RES´s significant growth in cumulative installed capacity in the last two decades and the significant cost reductions of RES and energy storage technologies are positive signs towards better market conditions for the global energy transition. Currently, the crisis is seen by international agencies and transition scholars as an opportunity to advance a renewable-based energy transformation. Nevertheless, this article aims at caution about another possibility: if societal changes are not urgently implemented, the crisis may weaken the global energy transition. This article examines this last possibility from a three-level perspective: 1) post-COVID economic recovery, 2) low oil and natural gas prices and competitiveness of alternative sources and, 3) reorganization of the world energy market and the OPEC+. This paper exists to stimulate debate.

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“…As a consequence, some of these pressing sustainability issues such as the conversion of land with high carbon stocks such as forests into cropland being shifted to other sectors of the bio-based economy which are not directly addressed by mandatory sustainability requirements. These leakage effects, which are related to different topics such as indirect land use change, carbon debt or food security risks are still intensively discussed in the EU bioenergy sector [12,40,41].…”

Section: Leakage Effects From Eu Bbe Policiesmentioning

confidence: 99%

Gaps and Research Demand for Sustainability Certification and Standardisation in a Sustainable Bio-Based Economy in the EU

et al. 2018

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The concept of the bio-based economy has gained increasing attention and importance in recent years. It is seen as a chance to reduce the dependency on fossil resources while securing a sustainable supply of energy, water, and raw materials, and furthermore preserving soils, climate and the environment. The intended transformation is characterized by economic, environmental and social challenges and opportunities, and it is understood as a social transition process towards a sustainable, bio-based and nature-oriented economy. This process requires general mechanisms to establish and monitor safeguards for a sustainable development of the bio-based economy on a national and EU level. Sustainability certification and standardisation of bio-based products can help to manage biogenic resources and their derived products in a sustainable manner. In this paper, we have analysed the current status of sustainability certification and standardisation in the bio-based economy by conducting comprehensive desktop research, which was complemented by a series of expert interviews. The analysis revealed an impressive amount of existing certification frameworks, criteria, indicators and applicable standards. However, relevant gaps relating to existing criteria sets, the practical implementation of criteria in certification processes, the legislative framework, end-of-life processes, as well as necessary standardisation activities, were identified which require further research and development to improve sustainability certification and standardisation for a growing bio-based economy.

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Debt and damages: What are the chances of staying under the 2°C warming threshold?

Cited by 23 publications

References 22 publications

How can green differentiated capital requirements affect climate risks? A dynamic macrofinancial analysis

How can green differentiated capital requirements affect climate risks? A dynamic macrofinancial analysis

How the COVID-19 Crisis is Showing us the Complexities in the Global Energy Transition

Gaps and Research Demand for Sustainability Certification and Standardisation in a Sustainable Bio-Based Economy in the EU

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