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Finance and climate: The transition to a low-carbon and climate-resilient economy from a financial sector perspective

Author

Listed:
  • Jean Boissinot
  • Doryane Huber
  • Gildas Lame

Abstract

Climate change is a major political and economic challenge. This paper sketches out its relevance for the financial sector. Necessary low-carbon investments imply a significant yet manageable financing gap. However, we argue that beyond capital mobilisation that has attracted most attention until now, the main challenge is ensuring a transition-consistent capital reallocation. The financial sector has a key role to play in that respect, complementary to appropriately designed climate policies. To help the financial system fulfil its role, the understanding of the economics of climate change should be deepened and a sector-wide businessoriented appropriation of these issues should be promoted. JEL classification: Q54, E10, E44, G12, G14, G21, G22, G23, G28. Keywords: Climate change, low carbon, climate finance, green finance, investment, capital allocation, financial system, risks

Suggested Citation

  • Jean Boissinot & Doryane Huber & Gildas Lame, 2016. "Finance and climate: The transition to a low-carbon and climate-resilient economy from a financial sector perspective," OECD Journal: Financial Market Trends, OECD Publishing, vol. 2015(1), pages 7-23.
    • Handle: RePEc:oec:dafkad:5jrrz76d5td5
    DOI: 10.1787/fmt-2015-5jrrz76d5td5
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    Citations

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    Cited by:

    1. Johannes Pfeiffer, 2017. "Fossil Resources and Climate Change – The Green Paradox and Resource Market Power Revisited in General Equilibrium," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 77.
    2. Nadia Ameli & Paul Drummond & Alexander Bisaro & Michael Grubb & Hugues Chenet, 2020. "Climate finance and disclosure for institutional investors: why transparency is not enough," Climatic Change, Springer, vol. 160(4), pages 565-589, June.
    3. Qianqian Guo & Zhifang Su & Chaoshin Chiao, 2022. "Carbon emissions trading policy, carbon finance, and carbon emissions reduction: evidence from a quasi-natural experiment in China," Economic Change and Restructuring, Springer, vol. 55(3), pages 1445-1480, August.
    4. Jovelyn Ferrer & Juliana Malagon & Enrique ter Horst, 2023. "Does Climate Change News Matter?," Sustainability, MDPI, vol. 15(18), pages 1-16, September.
    5. Carnevali, Emilio & Deleidi, Matteo & Pariboni, Riccardo & Veronese Passarella, Marco, 2021. "Cross-border financial flows and global warming in a two-area ecological SFC model," Socio-Economic Planning Sciences, Elsevier, vol. 75(C).

    More about this item

    Keywords

    climate change; low carbon; climate finance; green finance; investment; capital allocation; financial system; risks;
    All these keywords.

    JEL classification:

    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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