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Macroeconomic and environmental effects of portfolio decarbonisation strategies

Author

Listed:
  • Anna Bartocci

    (Bank of Italy)

  • Pietro Cova

    (Bank of Italy)

  • Valerio Nispi Landi

    (Bank of Italy)

  • Andrea Papetti

    (Bank of Italy)

  • Massimiliano Pisani

    (Bank of Italy)

Abstract

We show, using three different macroeconomic models, that portfolio decarbonisation strategies, by imposing tighter financing conditions on firms that can engage in both brown and green investments, may not reduce CO2 emissions or reduce them at the cost of output loss. On the contrary, portfolio decarbonisation strategies that selectively relax and tighten the financing conditions for, respectively, green and brown investments, could lower emissions and improve macroeconomic activity.

Suggested Citation

  • Anna Bartocci & Pietro Cova & Valerio Nispi Landi & Andrea Papetti & Massimiliano Pisani, 2024. "Macroeconomic and environmental effects of portfolio decarbonisation strategies," Questioni di Economia e Finanza (Occasional Papers) 874, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_874_24
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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2024-0874/QEF_874_24.pdf
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    References listed on IDEAS

    as
    1. Hélia Costa & Lilas Demmou & Guido Franco & Stefan Lamp, 2024. "Making the grass greener: The role of firm’s financial and managerial capacity in paving the way for the green transition," OECD Economics Department Working Papers 1791, OECD Publishing.
    2. Alessandro Ferrari & Valerio Nispi Landi, 2025. "Will the Green Transition be Inflationary? Expectations Matter," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 73(4), pages 1195-1258, December.
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    Cited by:

    1. Alessandro Moro & Andrea Zaghini, 2025. "Cui prodest? The heterogeneous impact of green bonds on companies' ESG score," Temi di discussione (Economic working papers) 1499, Bank of Italy, Economic Research and International Relations Area.
    2. Fornari, Fabio & Pianeselli, Daniele & Zaghini, Andrea, 2026. "Environmental score and bond pricing: It better be good, it better be green," Journal of International Money and Finance, Elsevier, vol. 161(C).
    3. Cristina Angelico & Enrico Bernardini, 2025. "Banks' carbon pledges: amazing or a maze?," Questioni di Economia e Finanza (Occasional Papers) 906, Bank of Italy, Economic Research and International Relations Area.
    4. Nickel, Christiane & Kilponen, Juha & Moral-Benito, Enrique & Koester, Gerrit & Ciccarelli, Matteo & Enders, Almira & Holton, Sarah & Landau, Bettina & Venditti, Fabrizio & Bobeica, Elena & Brand, Cla, 2025. "A strategic view on the economic and inflation environment in the euro area," Occasional Paper Series 371, European Central Bank.

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    More about this item

    Keywords

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    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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