Francesco Caselli, Alexander Ludwig, Rick van der Ploeg, 08 October 2021

The target for global warming agreed on in the 2015 Paris Agreement implies that effective policies must be implemented to reduce emissions for the whole planet as soon as possible and reach net zero in the second half of the 21st century. The contributions in a new CEPR eBook aim to identity, for each of the featured nations, which climate change policies will have the fastest and/or largest cumulative impact, and which are the most technically, financially, or politically feasible. Although the low-hanging fruit in climate policy vary across countries, this does not mean that one country cannot learn from the debates taking place in another.

Yener Altunbaş, David Marques-Ibanez, Alessio Reghezza, Costanza Rodriguez d'Acri, Martina Spaggiari, 21 May 2021

The Paris Agreement explicitly recognises the need to “make finance flows compatible with a pathway toward low greenhouse gas emissions and climate-resilient development”. This column looks at the impact of the agreement on bank lending and finds that following the agreement, European banks reallocated credit away from polluting firms. In the aftermath of President Trump’s 2017 announcement of a US withdrawal from the agreement, lending by European banks to polluting firms in the US decreased even further. The findings suggest that the announcement of green policy initiatives can have a significant impact combating climate change via the banking sector. 

Patrick Bolton, Marcin Kacperczyk, 24 March 2021

A company’s carbon-transition risk – associated with curbing carbon emissions within a relatively short period of time – is proportional to the size and growth rate of the company’s carbon emissions. This column asks whether companies with different carbon emissions have different stock returns. The total level of a company’s CO2 emissions and the year-by-year growth in emissions significantly affect its stock returns in most geographic areas of the world. The increasing cost of equity for companies with higher emissions can be a form of carbon pricing by investors seeking compensation for carbon-transition risk.

Torsten Ehlers, Benoit Mojon, Frank Packer, Luiz A. Pereira da Silva, 12 December 2020

Projects financed by green bonds have not always resulted in decreased carbon emissions at the firm level. This column – published on the 5th anniversary of the Paris Agreement – outlines three features of a simple rating system that could both encourage firms to reduce their carbon footprint and provide a useful signal to investors. By focusing on firms’ carbon intensity (emissions relative to revenue), this system would complement existing green bond labels while embracing the features most conducive to decisively lowering carbon emissions.

Richard Samans, 22 September 2019

The world’s climate change strategy and the global trading system are both in need of an infusion of fresh momentum. This column argues that the climate and trade diplomatic communities need each other more than they know, and it is time to bring them together. The best way to reinvigorate both climate and trade diplomacy is to think and act outside the box of the Paris Agreement and conventional free trade agreements and push for low-carbon trade agreements.

Ralph De Haas, 15 June 2018

In the 2015 Paris Agreement, participating countries committed to trying to limit the increase in the global temperature to no more than 2 degrees, requiring a major transition in the way we produce products and services. Ralph de Haas explains his research on how this Green Transition can be financed, and whether certain types of finance - in particular stock vs. credit markets - are better suited to achieving 'greener growth'. This video was recorded at CEPR's Third Annual Spring Symposium.

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