Conference Agenda

Achieving global climate and biodiversity goals requires unprecedented levels of green investment, yet the financing conditions facing public and private actors remain deeply unequal. This paper develops a heuristic, dynamic framework to explain how financing conditions for green assets and actions emerge, evolve, and interact with macroeconomic structures. Combining insights from ecological macroeconomics, neo-Schumpeterian theory, and balance-sheet approaches, we conceptualise the green finance gap not as a static shortfall, but as a dynamic misalignment between needed actions, the agents capable of implementing them, and the funding sources they can effectively access. We demonstrate how heterogeneous costs, risks, expected returns, and context-specific constraints shape a path-dependent selection of green investments, thereby influencing their distributive and economic effects. Our approach clarifies how different green-finance mechanisms — including cost-reducing instruments, resource-enabling tools, and risk-mitigation schemes — can reshape the investment environment and alter agents’ financing conditions to reach ecological targets. These insights provide a foundation for more context-specific policy design and call for future empirical work linking project-level dynamics, institutional arrangements, and macro-financial vulnerabilities across diverse national settings.

This paper examines the distributional consequences of carbon pricing and alternative revenue-recycling schemes using an environmental dynamic stochastic general equilibrium model calibrated to the U.S. economy. The general equilibrium setting captures both income and consumption channels through which carbon pricing affects low- and high-income households. We compare several redistribution options, including transfers to low-income households, labor and consumption tax cuts, and government investment in the green sector. Results show that carbon pricing increases inequality in the absence of revenue recycling, even without heterogeneity in household emissions intensity of consumption or employment across sectors, challenging conventional explanations of inequality under carbon pricing. Transfers to low-income households most effectively reduce inequality, but at the cost of lower output. Labor tax cuts balance efficiency and equity, while policies supporting green companies tend to worsen inequality. The welfare-optimal policy depends on society’s inequality aversion: labor tax cuts dominate when efficiency is prioritized, whereas transfers are preferred when equity concerns are stronger.

This paper develops a three-region open-economy DSGE model, calibrated to 2023 data for the European Union and China, to study how alternative carbon-pricing regimes shape the bilateral trade balance. Energy enters both production and household consumption, while a third region supplies oil and natural gas on integrated world markets and participates in international asset trading. We simulate a tightening of the EU ETS1 cap and compare alternative coverage of household and Chinese industrial emissions, as well as the introduction of a carbon border adjustment mechanism. A tighter EU cap raises domestic carbon costs, lowers European fossil-fuel demand, and depresses world fuel prices, improving Chinese cost competitiveness and worsening the EU--China trade balance. Extending coverage to household emissions through ETS2 amplifies this effect by preventing a domestic fossil-fuel rebound. By contrast, whether China uses a tax or an ETS has little quantitative influence. A CBAM raises the landed price of Chinese goods, limits import substitution, attenuates the short-term deterioration of the trade-balance and modestly reduces carbon leakage.

The distributional effects of climate change are at the heart of international climate negotiations. This paper shows how different property rights regimes, ranging from “right to pollute” to “right to no pollution”, rationalize different welfare weights in climate-economic models with heterogeneous regions. Commonly used Negishi weights separate the issues of climate change and global wealth inequality. However, we show that the separation of these issues does not yield a unique Pareto efficient allocation since climate change and climate policies have distributional consequences of their own. As a result, different property rights characterize a set of efficient allocations. In addition to Negishi weights, which implicitly reflect mixed property rights, we define beneficiary pays and polluter pays weights, derived from liability rules consistent with right to pollute and right to no pollution property rights, respectively. These weights correspond to distinct Pareto efficient allocations that differ only in the distribution of the cost burden of climate damages and abatement, and we show how nations’ characteristics shape their preferences for different property rights regimes. Unlike the Negishi solution, the other efficient allocations involve international transfers for abatement and climate damages, providing theoretically grounded definitions for climate mitigation finance and Loss and Damage payments—both widely discussed in international negotiations. We use calibrated simulations to illustrate the distributional implications of different property rights regimes.