Money, Finance and Climate: The Elusive Quest for a Truly Integrated Assessment Model

Etienne Espagne ()
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Etienne Espagne: Agence Française de Développement

Comparative Economic Studies, 2018, vol. 60, issue 1, No 11, 143 pages

Abstract: Abstract In this paper, we show how existing IAMs generally omit any representation of a financial sector. We then discuss the potential impacts of climate change policies and climate change events on the financial sector as shown in the existing literature. We underline how the structure of the financial sector itself could impact the carbon trend of the economy. We then see how these specific linkages between the financial and the climate sector can be represented in new types of IAMs, and how they have already started to be addressed, notably in the stock-flow consistent models literature. We conclude on the necessary convergence agenda between climate policies addressing the financial goals in article 2 of the Paris Agreement and financial sector reforms to dampen the intrinsic financial instability.

Keywords: Climate finance; Paris Agreement; IAM; Financial instability; Stock-flow consistent models (search for similar items in EconPapers)
JEL-codes: E12 E6 G1 Q54 Q57 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (8)

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DOI: 10.1057/s41294-018-0055-7

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