Post Covid-19 stimulus and bailouts need to be compatible with the Paris Agreement

Ben Caldecott

Journal of Sustainable Finance & Investment, 2022, vol. 12, issue 3, 886-893

Abstract: Covid-19 recovery efforts via public and private finance should not support assets and companies that are incompatible with the Paris Agreement. Yet even before the current crisis, there was a lack of agreement about what investor portfolio or bank loan book alignment with climate change outcomes actually means, and what assets are (in)compatible with different carbon budgets and global warming thresholds. We need to clarify this urgently and embed it within decision-making frameworks. Assessing (in)compatibility with a warming threshold should take account of carbon lock-in. We also need to develop appropriate confidence levels for measuring (in)compatibility. The state of (in)compatibility changes under different circumstances and targets for alignment should be set in a way that explicitly acknowledges these uncertainties. A portfolio with a lower confidence level would be less desirable than one with the same level of alignment and a higher level of confidence.

Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/20430795.2020.1809292 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:jsustf:v:12:y:2022:i:3:p:886-893

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/TSFI20

DOI: 10.1080/20430795.2020.1809292

Access Statistics for this article

Journal of Sustainable Finance & Investment is currently edited by Dr Matthew Haigh

More articles in Journal of Sustainable Finance & Investment from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().