Low-carbon transition, stranded assets, financial stability, and the role of central banks

Louison Cahen-Fourot

Chapter 24 in The Elgar Companion to Energy and Sustainability, 2024, pp 372-383 from Edward Elgar Publishing

Abstract: This chapter reviews the nexus between the low-carbon transition, stranding risk, financial instability, and the role of central banks. It provides an overview of stranding risk estimates of productive and financial assets and discusses the significance of these estimates. Stranding risks must be assessed considering their relevance in terms of total capital stock but also in relation to the geographical distribution of losses and the nature of owners involved in such losses, e.g., states vs. private owners. Additionally, the chapter links the discussion on stranded assets to the role of central banks as they have an important stabilizing role in enhancing states’ financial ability to tackle asset stranding and losses in fossil fuel revenues. Normative approaches to the role of central banks in the context of the ecological crisis are surveyed.

Keywords: Business and Management; Development Studies; Economics and Finance; Environment; Geography; Innovations and Technology; Law - Academic; Politics and Public Policy Sustainable Development Goals (search for similar items in EconPapers)
Date: 2024
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