CO2 emissions

The financial sector low carbon economy conundrum

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The research paper studies the historical relation between carbon emissions and financial stock returns of European-based listed companies from 2010 to 2020. A financial econometric approach is established to investigate the linear relation between the output (annual stock returns) and the input variables, including stocks annual CO2 emissions equivalent, and its significance.

Is the financial sector sufficient to timely shift the transition of the global economy with respect to the intertemporal carbon budget constraint we are bound to, as computed by IAM models, and described in the latest IPCC report? [1] What is the average implicit price financial markets are generally requiring for carbon emissions? Is this price sufficient for a timely two-degree scenario transition implementation in the EU? These past 10 years of loose climate economic policies, characterized by crises and fragmented trade and cap/carbon taxes systems, have created an important conundrum for ...

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Banque et Stratégie Nº408