scholarly journals The Costs and Trade-Offs of Green Central Banking: A Framework for Analysis

Energies ◽  
2021 ◽  
Vol 14 (16) ◽  
pp. 5168
Author(s):  
Radu Șimandan ◽  
Cristian Păun
Keyword(s):  
Climate Change ◽  
Environmental Sustainability ◽  
Financial Stability ◽  
Central Banks ◽  
Central Banking ◽  
Smooth Transition ◽  
Low Carbon ◽  
Low Carbon Economy ◽  
Macroprudential Policies ◽  
Trade Offs

The participation of central banks in the fight against climate change has recently been advanced in several academic articles and policy papers. Since the emerging consensus is that climate change poses financial risks, the envisaged green central banking has a responsibility to address environmental sustainability as a means of promoting financial stability—an increasingly accepted goal of central banks in the post-financial crisis world. Thus far, the pro side of the argument is well represented in the literature, though often the benefits remain implicit: with the help of central banks via monetary and macroprudential policies, a smooth transition to a low-carbon economy would be somehow beneficial to all of us. With this article, we aim to add to this literature by looking at the costs and trade-offs of this course of action in light of the observation that the con side of the proposal has been only marginally addressed. We put forward a framework for the analysis of the costs and trade-offs of green central banking and exemplify the applicability of this framework by studying three cases of central banks for which the transition to green operation has been advanced. We find evidence that if costs and trade-offs are taken into account, the case in favor of greening central banks becomes less straightforward than is currently conveyed in the literature.

The Managing Director’s Statement on the Role of the Fund in Addressing Climate Change

Policy Papers ◽  
2015 ◽  
Vol 15 (75) ◽  
Author(s):  
Keyword(s):  
Climate Change ◽  
Financial Stability ◽  
Critical Role ◽  
Greenhouse Gas Mitigation ◽  
Low Carbon ◽  
Economic Resilience ◽  
Macroeconomic Policies ◽  
Carbon Pricing ◽  
Economic Agents ◽  
Low Carbon Economy

The Fund has a role to play in helping its members address those challenges of climate change for which fiscal and macroeconomic policies are an important component of the appropriate policy response. The greenhouse gas mitigation pledges submitted by over 160 countries ahead of the pivotal Climate Conference in Paris in December represent an important step by the international community towards containing the extent of global warming. Strategies for reducing emissions will reflect countries’ differing initial positions, political constraints and circumstances. Carbon pricing can, however, play a critical role in meeting in the most efficient and effective way the commitments that countries are now entering into; it can also raise substantial revenues that can be used to reduce other, more distorting taxes. Through its incentive effects, carbon pricing will also help mobilize private finance for mitigation activities and spur the innovation needed to address climate challenges. Finance ministries have a key role to play in promoting and implementing these policies and ensuring efficient use of the revenue raised. The process of climate change is set to have a significant economic impact on many countries, with a large number of lower income countries being particularly at risk. Macroeconomic policies in these countries will need to be calibrated to accommodate more frequent weather shocks, including by building policy space to respond to shocks; infrastructure will need to be upgraded to enhance economic resilience. It will be important that developing countries seeking to make these adaptations have access to sufficient financial support on generous terms. Financial markets will play an important role in helping economic agents and governments in coping with climate change-induced shocks. And heightened climate vulnerabilities and the structural adjustments associated with a shift towards a low-carbon economy over the medium-term will have important implications for financial institutions and financial stability. This paper identifies areas in which the Fund has a contribution to make in supporting its members deal with the macroeconomic challenges of climate change, consistent with national circumstances. It draws on materials contained in a forthcoming Staff Discussion Note (Farid et al. 2015) and has benefited from the discussions at informal Board meetings on IMF work on climate change held on September 30 and November 24, 2015.

scholarly journals Climate Change: EU taxonomy and forward looking analysis in the context of emerging climate related and environmental risks

2020 ◽  
Vol 3 (2020) ◽  
pp. 48-64
Author(s):  
Giuliana Birindelli ◽  
◽  
Vera Palea ◽  
Luca Trussoni ◽  
Fabio Verachi ◽  
...  
Keyword(s):  
Climate Change ◽  
Financial Stability ◽  
Global Economy ◽  
Financial Risk ◽  
Task Force ◽  
Low Carbon ◽  
Stress Tests ◽  
Low Carbon Economy ◽  
The Impact ◽  
Forward Looking

Climate change is causing substantial structural adjustments to the global economy. Several sectors, such as coal and steel, are undergoing severe problems related to the inevitable transition to a low-carbon economy, while others such as renewables and new environmental adaptation technologies are benefiting substantially. In this context, regulators are beginning to intervene on the legislation, while investors, customers and civil society are looking for alternatives to mitigate, adapt and make these issues more transparent. This article aims to analyze the impact that these changes will inevitably have on banks' balance sheets, introducing new risks but also opportunities. The final purpose is to help banks integrate climate risks into their organizational framework and to provide guidance on the implementation of the recommendations published by the Task Force on Climate-related Financial Disclosures (TCFD) within the broader Financial Stability Board (FSB) objectives and the UN Environment Finance Initiative (UNEP FI). Starting from a long-term perspective, the work suggests considering climate risk as a financial risk, overcoming traditional approaches that focus on reputational risk. This change implies the integration of climate change risk into the logic of Risk Management (Credit, Market and Operational risks) and a consequent sharing of responsibilities with the structures of Corporate Social Responsibility (CSR). The TCFD recommendations urge banks to use forward looking scenario analyzes, including stress tests, to evaluate and disseminate the "actual and potential impacts" of climate-related risks and opportunities, suggesting in particular to consider the consequences in terms of two categories of risk: physical and transition risk

scholarly journals Information Disclosure and the Transition to a Low-Carbon Economy: Climate-Related Risk in the UK and France

2019 ◽  
Vol 32 (2) ◽  
pp. 279-308
Author(s):  
Emily Webster
Keyword(s):  
Climate Change ◽  
Information Disclosure ◽  
Financial Stability ◽  
Low Carbon ◽  
Risk Disclosure ◽  
Low Carbon Economy ◽  
Climate Risks ◽  
Policy Tool ◽  
The Uk ◽  
Carbon Economy

Abstract Over the last several years there has been increasing recognition and acceptance of the threat that climate change poses to global financial stability and the concurrent need for corporations to identify and account for both climate risks and their impacts on the environment. This has resulted in the emergence of climate risk disclosure (CRD) as a voluntary standard as well as movement on the domestic level to introduce mandatory CRD, demonstrated by the introduction of CRD framework legislation in France. This article conducts a comparative analysis of France and the UK—countries that are adopting divergent methods of legal development towards CRD—to analyse the potential of CRD as a policy tool to aid towards climate change mitigation and the transition to a low-carbon economy, and evaluate how effectively this is being achieved in practice.

scholarly journals Aligning Climate Change and Sustainable Development Goals With an Innovation Systems Roadmap for Renewable Power

2020 ◽  
Vol 1 ◽  
Author(s):  
Rebecca R. Hernandez ◽  
Sarah M. Jordaan ◽  
Ben Kaldunski ◽  
Naresh Kumar
Keyword(s):  
Climate Change ◽  
Sustainable Development ◽  
Renewable Energy ◽  
Environmental Sustainability ◽  
Sustainable Development Goals ◽  
Innovation Systems ◽  
Low Carbon ◽  
Environmental Consequences ◽  
Research Themes ◽  
Development Goals

Energy development improves quality of life for humans, but also incurs environmental consequences. A global energy transition from fossil fuels to renewable energy may mitigate climate change but may also undermine the capacity to achieve some or all 17 Sustainable Development Goals (SDGs). In this study, we use an innovation systems approach to construct a comprehensive roadmap for solar and wind energy to anticipate and improve impacts of a transition to a low carbon future in a manner ensuring climate goals and SDGs are mutually reinforcing. Our multidisciplinary approach began with an assessment of public investments in renewable energy followed by a 2-day research prioritization workshop. Fifty-eight expert workshop participants identified six research themes that proactively address the environmental sustainability of renewable energy. Next, we identified linkages between the six research themes and all 17 SDGs. Finally, we conducted a scientiometric analysis to analyze the research maturity of these themes. The results of these efforts elucidated the limits of existing knowledge of renewable energy-SDG interactions, informing the development of a research, development, demonstration, and deployment (RD3) roadmap to a renewable energy future aligned with both climate goals and SDGs. The RD3 roadmap has been designed to systematically develop solutions for diverse actors and organizations. Overall, our findings confer a broad vision for a sustainable transition to renewables to minimize unintended environmental consequences while supporting interoperability among actors particularly poised to influence its magnitude and direction.

Alternative scenarios for the future of the Canadian boreal zone1

2019 ◽  
Vol 27 (2) ◽  
pp. 185-199 ◽  
Author(s):  
James W.N. Steenberg ◽  
Peter N. Duinker ◽  
Irena F. Creed ◽  
Jacqueline N. Serran ◽  
Camille Ouellet Dallaire
Keyword(s):  
Climate Change ◽  
Ecosystem Services ◽  
Adaptive Capacity ◽  
Fossil Fuels ◽  
Global Climate ◽  
Policy Implications ◽  
Low Carbon ◽  
Boreal Zone ◽  
Low Carbon Economy ◽  
Carbon Economy

In response to global climate change, Canada is transitioning towards a low-carbon economy and the need for policy approaches that are effective, equitable, coordinated, and both administratively and politically feasible is high. One point is clear; the transition is intimately tied to the vast supply of ecosystem services in the boreal zone of Canada. This paper describes four contrasting futures for the boreal zone using scenario analysis, which is a transdisciplinary, participatory approach that considers alternative futures and policy implications under conditions of high uncertainty and complexity. The two critical forces shaping the four scenarios are the global economy’s energy and society’s capacity to adapt. The six drivers of change are atmospheric change, the demand for provisioning ecosystem services, the demand for nonprovisioning ecosystem services, demographics, and social values, governance and geopolitics, and industrial innovation and infrastructure. The four scenarios include: (i) the Green Path, where a low-carbon economy is coupled with high adaptive capacity; (ii) the Uphill Climb, where a low-carbon economy is instead coupled with low adaptive capacity; (iii) the Carpool Lane, where society has a strong capacity to adapt but a reliance on fossil fuels; and (iv) the Slippery Slope, where there is both a high-carbon economy and a society with low adaptive capacity. The scenarios illustrate the importance of transitioning to a low-carbon economy and the role of society’s adaptive capacity in doing so. However, they also emphasize themes like social inequality and adverse environmental outcomes arising from the push towards climate change mitigation.

scholarly journals Tackling the Risk of Stranded Electricity Assets with Machine Learning and Artificial Intelligence

2021 ◽  
Author(s):  
Joseph Nyangon
Keyword(s):  
Climate Change ◽  
Artificial Intelligence ◽  
Machine Learning ◽  
Carbon Budget ◽  
Energy Sector ◽  
Low Carbon ◽  
Low Carbon Economy ◽  
Legal Challenges ◽  
Nationally Determined Contributions ◽  
Implementation Level

The Paris Agreement on climate change requires nations to keep the global temperature within the 2°C carbon budget. Achieving this temperature target means stranding more than 80% of all proven fossil energy reserves as well as resulting in investments in such resources becoming stranded assets. At the implementation level, governments are experiencing technical, economic, and legal challenges in transitioning their economies to meet the 2°C temperature commitment through the nationally determined contributions (NDCs), let alone striving for the 1.5°C carbon budget, which translates into greenhouse gas emissions (GHG) gap. This chapter focuses on tackling the risks of stranded electricity assets using machine learning and artificial intelligence technologies. Stranded assets are not new in the energy sector; the physical impacts of climate change and the transition to a low-carbon economy have generally rendered redundant or obsolete electricity generation and storage assets. Low-carbon electricity systems, which come in variable and controllable forms, are essential to mitigating climate change. These systems present distinct opportunities for machine learning and artificial intelligence-powered techniques. This chapter considers the background to these issues. It discusses the asset stranding discourse and its implications to the energy sector and related infrastructure. The chapter concludes by outlining an interdisciplinary research agenda for mitigating the risks of stranded assets in electricity investments.

scholarly journals Mudanças Climáticas no Semiárido Brasileiro: Experiências e Oportunidades para o Desenvolvimento (Climate Change in the Brazilian semiarid: Experiences and Opportunities for Development)

2015 ◽  
Vol 8 ◽  
pp. 484 ◽  
Author(s):  
Francislene Angelotti ◽  
Diana Signor ◽  
Vanderlise Giongo
Keyword(s):  
Climate Change ◽  
Sustainable Development ◽  
Environmental Sustainability ◽  
Social Inclusion ◽  
Green Economy ◽  
Environmental Services ◽  
Low Carbon ◽  
Adaptation Measures ◽  
Mitigation And Adaptation ◽  
Brazilian Semiarid

A comunidade científica, ao longo dos últimos anos, tem buscado soluções para o desenvolvimento sustentável do Semiárido. Os estudos dos impactos das mudanças climáticas subsidiam medidas de mitigação e adaptação frente às futuras alterações no clima. Adicionalmente, o desenvolvimento e adoção de processos e tecnologias voltados para o desenvolvimento sustentável, tendo em vista a viabilidade econômica, social e ambiental são fundamentais, para aumentar a segurança alimentar, gerenciar os recursos hídricos e erradicar a pobreza. O avanço do conhecimento obtido nos últimos anos e a interação entre as instituições de ensino e pesquisa assumem um papel importante na proposição e adoção de políticas públicas que visam aumentar a capacidade adaptativa da sociedade e da economia regional frente às mudanças climáticas, criando espaços de oportunidades e caminhos para a resiliência climática. Nesse sentido, a busca de soluções e oportunidades para o desenvolvimento do Semiárido brasileiro é estratégico, razão pela qual mantem-se um fórum de discussão permanente traduzido no Simpósio de Mudanças Climáticas e Desertificação no Semiárido Brasileiro, realizado bianualmente. A adoção de ações voltadas para o desenvolvimento sustentável é estratégica. A economia verde e o pagamento por serviços ambientais se tornaram oportunidades, pois atualmente o desenvolvimento econômico não pode estar dissociado das preocupações com relação às mudanças no clima e a preservação do ambiente. Para o Semiárido brasileiro é necessário fortalecer as ações em andamento e buscar soluções inovadoras para reduzir os impactos e riscos inerentes às mudanças climáticas, criar oportunidades na economia de baixo carbono e promover a inclusão social. The scientific community over the last few years has been sought solutions for sustainable development of the semiarid. The research about impacts of climate change is subsidizing mitigation and adaptation measures facing future changes, in semi-arid region. In addition, the development and adoption of processes and technologies for sustainable development, in view of economic, social and environmental sustainability are essential to increasing food security, manage water resources and eradicate poverty. The knowledge progress achieved in recent years and the interaction between education and research institutions play an important role on proposition and adopting public policies that aimed to increase the adaptive capacity of society and the regional economy to climate change, creating opportunities spaces and directions for climate resilience. In this sense, the search for solutions and opportunities for the development of the Brazilian semiarid is strategic, which is why keeping a permanent discussion forum translated at the Symposium on Climate Change and Desertification in the Brazilian semiarid carried out every two years. The adoption of actions for sustainable development, in view of economic, social and environmental viability is strategic. The green economy and payment for environmental services have become opportunities because currently the economic development cannot be dissociated from concerns about climate change. For the Brazilian semiarid is necessary to strengthen actions in progress and seek innovative solutions to reduce the impacts and risks posed by climate change, creating opportunities in the low carbon economy and promoting social inclusion. Key-words: adaptation, mitigation, environmental services, research.   

Sign in / Sign up

Export Citation Format

Share Document