Monasterolo, Irene. 2020. Climate change and the financial system. Annual Reviews of Resource Economics. 12 1-22.

RIS

@ARTICLE{Monasterolo2020,
title = {Climate change and the financial system},
author = {Irene Monasterolo},
year = {2020},
doi = {https://doi.org/10.1146/annurev-resource-110119-031134},
url = {https://www.annualreviews.org/doi/10.1146/annurev-resource-110119-031134},
volume = {12},
language = {EN},
pages = {1-22},
journal = {Annual Reviews of Resource Economics},
abstract = {The financial system could help achieve the global climate targets by aligning investments to sustainability. However, investors are largely exposed to carbon-intensive assets that could become stranded, thus delaying the low-carbon transition and bringing new sources of risk for financial stability, i.e., climate-related financial risks. Here, we discuss climate-related financial risks, the challenges they pose to traditional economic and financial risk assessment, and the implications for the implementation and feasibility of climate policies. We then present science-based approaches that introduce forward-looking climate risks and their deep uncertainty in financial risk management (e.g., via the climate value at risk, climate spread, climate stress-test). Finally, we present results of applications aimed at pricing climate risks in investors’ portfolios and calculating the largest losses that could lead to systemic risk, in collaboration with leading financial institutions.},
}