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The impact of climate-related fiscal and financial policies on carbon emissions in G20 countries: A panel quantile regression approach

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  • D'Orazio, Paola
  • Dirks, Maximilian W.

Abstract

This paper investigates the impact of climate-related fiscal and financial policies on CO2 emissions implemented by G20 countries in the period 2000-2017. The analysis show that the impact of various policy instruments is heterogeneous across the carbon emissions distribution. In particular, the effect of a green investment bank is significant across all percentiles and contributes to improving environmental quality. Moreover, our findings suggest that what matters is not the financial sector size per se or the amount of credit devoted to the private sector, but rather the type of finance. This suggests that policymakers and researchers should devote more effort to calibrate their policy instruments and develop an efficient policy mix to achieve climate change mitigation, especially in countries with high carbon emissions.

Suggested Citation

  • D'Orazio, Paola & Dirks, Maximilian W., 2020. "The impact of climate-related fiscal and financial policies on carbon emissions in G20 countries: A panel quantile regression approach," Ruhr Economic Papers 860, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:860
    DOI: 10.4419/86788996
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    mitigation strategies; financial regulation; green investment banks; carbon dioxide emissions; climate risks; green financey;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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