This comprehensive Handbook analyses the effects of climate change on financial markets, examining the policy measures required to mitigate its negative impact on market efficiency and different asset classes such as stocks, bonds, currencies and other financial hedges.
This comprehensive
Handbook analyses the effects of climate change on financial markets, examining the policy measures required to mitigate its negative impact on market efficiency and various asset classes such as stocks, bonds, currencies and other financial hedges.
Chapters review existing literature in the field, carrying out advanced econometric investigations to shed light on the implications of physical climate change and provide relevant policy advice. Contributors focus on the reduction of greenhouse gas emissions, providing detailed insight into green finance, sustainable investment and increasingly necessary ESG (environmental, social, and governance) measures. They explore a range of key topics including the role of monetary and macroprudential policies, carbon taxes and allowances and improvements in national governance systems. They also compare strategies across global, local, public and corporate levels, identifying the most efficient methods of financing a sustainable green transition.
The Handbook of Climate Change and Financial Markets is a valuable resource for scholars and students of financial, macro, monetary, environmental and energy economics. It is also beneficial for investors requiring appropriate portfolio and risk management strategies, as well as authorities tasked with climate change policies.
Arvustused
While the debate over climate change and ways to tackle it has been ongoing for more than 40 years, it is only relatively recently that economists have begun to investigate the interaction of climate change on financial markets. This Handbook is therefore extremely timely as this new area of investigation comes of age. The Handbook is written by an impressive group of researchers and is highly authoritative. It focuses on a range of topics: physical climate risks and financial markets, the impact of climate change on market efficiency and different asset classes, green finance and ESG measurement and a range of policy issues. -- Stephen Hall, Leicester University, UK Climate change represents one of the greatest challenges facing us, with major consequences for financial markets. But financial markets can also help policy makers address that challenge. This invaluable collection covers a vast range of associated topics and is sure to leave the reader with a wealth of new insights. -- Sir Charles Bean, London School of Economics, UK
Contents
PART I INTRODUCTION
1 Handbook of climate change and financial markets: an overview 2
Guglielmo Maria Caporale
PART II PHYSICAL CLIMATE RISK AND FINANCIAL MARKETS
2 Physical climate risks, financial markets and monetary policy 11
Joscha Beckmann
3 Physical climate effects and natural capital: interactions and implications
for economic and financial risk 24
Elizabeth K. Kiser and Caroline Norris
4 Climate physical risk and Asian stock market returns 57
Marina Albanese, Guglielmo Maria Caporale, Ida Colella, and Nicola Spagnolo
5 Climate-related physical risks and the financial sector 73
Celso Brunetti, Benjamin Dennis, Gurubala Kotta, and Caroline Conley Norris
6 Climate risk and financial stability: some panel evidence for the European
banking sector 94
Guglielmo Maria Caporale, Anamaria Diana Sova, and Robert Sova
PART III THE IMPACT OF CLIMATE CHANGE ON MARKET EFFICIENCY AND ON DIFFERENT
ASSET CLASSES
7 Beliefs about climate risks and market efficiency 110
Caterina Santi
8 Market efficiency and climate change 127
Alexandre C. Köberle, Sascha Dobbertin, and João Amaro de Matos
9 Testing for persistence in German green and brown stock market indices 151
Guglielmo Maria Caporale, Luis Alberiko Gil-Alana, Sakiru A. Solarin, and
OlaOluwa S. Yaya
10 The pricing of environmental risk: an empirical analysis of the European
industry portfolios 163
Nuno Cassola, Claudio Morana, and Elisa Ossola
11 Linkages among carbon emissions, renewable energy, stock markets, and
economic growth: evidence from the G7 countries 190
Eleftheria Kostika and Nikiforos Laopodis
12 Climate change and currency returns 220
Ilias Filippou, Mark P. Taylor, and Taizhi Wu
13 Navigating climatic risks: insights from the wheat market and strategies
for financial hedging 241
Giulia Nadalini and Silvia Romagnoli
PART IV GREEN FINANCE AND ESG MEASUREMENT
14 Financing the green transition: exploring corporate strategies and public
policy options 271
Agnieszka Gehringer
15 Sustainable investments: evolution, strategies, and contribution to
sustainability objectives 294
Dilyara Salakhova
16 Sustainable debt markets: the European perspective 330
Serena Fatica
17 Exploring the role of green finance in Italian SMEs: financing the
circular economy 347
Ginevra Coletti, Asia Guerreschi, and Massimiliano Mazzanti
18 ESG measurement uncertainty in Europe and beyond: the missing financial
link and accountability 367
ZsuzsaR. Huszár
19 ESG momentum in international equity returns and the SDG content of
financial asset portfolios 393
Phoebe Koundouri, Conrad Felix Michel Landis, Nikitas Pittis, and Panagiotis
Samartzis
PART V CLIMATE CHANGE AND POLICY ISSUES
20 Breaking the tragedy of the horizon: taking stock of central banks
climate-risk approaches a decade after Mark Carneys speech 419
David Barmes, Joseph Feyertag, Agnieszka Smoleska, and Simon Dikau
21 The greening of central banks 440
Clara I. Gonzalez and Soledad Núñez
22 Climate change and financial regulation 460
Dimitri Demekas and Pierpaolo Grippa
23 Financial interdependencies between carbon markets and energy commodities:
an application for the European Union Emissions Trading System 495
Andrea Flori
24 Just transition: issues for central banks and financial regulators 529
Pietro Calice and Dimitri G. Demekas
25 Building scenarios for climate stress-testing exercises 560
Stéphane Dées, Annabelle de Gaye, and Noëmie Lisack
26 Regulatory yield curves and climate-related scenarios 592
Fulvio Pegoraro
Edited by Guglielmo Maria Caporale, Professor of Economics and Finance, Department of Economics, Finance and Accounting, Brunel University of London, UK
