Conference Agenda

This paper studies how banks adjust credit allocation in response to firms’ exposure

to climate-related physical and transition risks. Using granular firm-level measures of

both risk types matched to a universal bank–firm credit dataset from Danish administrative registers, I document that banks reduce credit growth to firms with higher exposure to either risk. A one standard deviation increase in physical (transition) risk is associated with a 1.1–1.4% (1.6–2.2%) decline in loan growth. Beyond average

effects, I find evidence of credit reallocation toward firms with low joint exposure to

physical and transition risks and toward high-risk firms that engage in greening activities. The contraction in credit is strongest for financially constrained firms and among banks with greater climate risk exposure and repeat lending relationships. Additional results indicate that banks’ credit risk considerations play an important role in driving these lending responses.

Diffusing new technologies depends on overcoming financing constraints. We study scale economies in financing renewable energy projects using a dataset of 52,364 investment transactions spanning eight technologies in 73 between 2004 and 2017. A Bayesian hierarchical model shows that a 1\% increase in project scale is associated with a capital efficiency (Megawatt installed per dollar) increase of 0.18%. Leveraging transaction-specific investor data we find that banks (both private and state-owned) invest in larger-scale projects, compared with institutional investors. We causally identify that the absence of state bank participation reduces project size by 48-54%. We further show that greater state bank involvement coincides with lower state bank financing shares, implying that state banks enable larger projects primarily by mobilizing private co-investment rather than by directly financing them. Our findings imply that state-owned banks can play a role in reducing the financing needs for renewable energy and other risky infrastructure with scale economies by enabling larger-scale projects.

Climate policies, particularly market-based instruments like carbon pricing, are well-established as effective tools for reducing emissions. However, the growing prevalence of climate policy rollbacks presents a critical, yet underexplored, question: do climate policy rollbacks undo the effects they had on firm-level emissions and economic activities? Using the introduction and subsequent repeal of Australia’s carbon pricing mechanism (2012–2014) as a quasi-experiment, this paper provides novel firm-level evidence of how firms respond to climate policy rollbacks. Using a difference-in-differences framework, the analysis shows that the policy’s introduction significantly reduces regulated firms’ direct (Scope 1) emissions by approximately 15%. Following the rollback, emissions only partially rebound and do not return to pre-policy levels, indicating asymmetric and potentially non-reversible effects. Reductions are achieved primarily through operational downsizing rather than improvements in emissions intensity or new low-carbon investments. Evidence from the firms’ annual and sustainability reports suggests heterogeneous post-repeal trajectories are shaped by firms’ prior beliefs about policy permanence and their consequent operational adjustments. The findings underscore that while policy-induced decarbonisation can exhibit path dependence, the credibility and durability of climate policy remain crucial for long-term emission reductions.

This paper investigates how tax designs can influence consumer preferences toward taxation by examining the case of minced meat consumption in Japan. We compare value-added taxes and carbon taxes, varying the accompanying compensatory measures to explore the factors that enhance public acceptance of taxation while maintaining policy effectiveness. We find that public preferences for VAT and carbon taxes are generally similar, although carbon taxes are more sensitive to revenue allocation, particularly favoring green spending. Furthermore, we find that support for different revenue recycling options is shaped by whether benefits are private or social, and considerable variation exists across socio-demographic and attitudinal groups. These findings underscore the importance of considering, within the design of taxation, both framing and revenue recycling to ensure its social and political feasibility.

This paper investigates whether and to what extent armed conflict undermines countries’ ability to comply with international climate commitments. We introduce a novel target-based indicator of climate performance—the emissions gap—defined as the deviation between realized greenhouse gas emissions and nationally pledged targets under climate agreements. Using a panel of 135 countries from 1997 to 2024, we combine entropy balancing, instrumental-variable system GMM, and modern dynamic difference-in-differences estimators to identify the causal effect of conflict exposure.

We show that armed conflict systematically widens the emissions gap, with the strongest effects observed during the Kyoto period and persistent impacts under the Paris framework. A global counterfactual analysis reveals that, in the absence of conflict, the world would have moved substantially closer to its climate targets. Fiscal crowding-out emerges as a key transmission channel, as conflicts reallocate public resources toward security at the expense of environmental investment. However, stronger fiscal capacity, higher innovation intensity, and greater access to concessional climate finance significantly attenuate these effects, with particularly large impacts in developing economies and under conditional NDCs. Overall, the results highlight the central role of political stability and institutional capacity in sustaining climate action and suggest that neglecting armed conflict leads to systematic overestimation of global mitigation potential under international agreements.

This study investigates the relationship between different types of within-country inequality reduction and CO2 emissions using panel data in 156 countries from1995 to 2020. Using fixed effects panel and quantile regression techniques, we report estimates that indicate that predistribution (gross inequality reduction) increases carbon emissions less than redistribution (net inequality reduction). Moreover, we differentiate between the effect of predistribution and redistribution on production-based and consumption-based emissions. Countries that produce more carbon-intensive products than they consume and low emitting countries face the highest trade-off between predistribution and decarbonization. By contrast, reduction in inequality through predistribution does not affect per capita consumption-based CO2 emissions among the highest emitting countries. These findings call for international cooperation and public policies aimed at a more equitable primary income distribution to achieve joint inequality and carbon emission reduction.

This paper develops an analytical model to determine the optimal trajectory of carbon taxation under a carbon budget and a public-support constraint. Public support is modeled as an endogenous state variable, determined by tax levels and opinion dynamics. We find that the optimal tax path depends on the marginal sensitivities of public support and emissions to tax changes as well as on the characteristics of opinion dynamics. In particular, under conformist opinion dynamics, a low initial tax can generate strong public support, in turn triggering positive feedback that allows for subsequent tax increases. In contrast, when opinion dynamics are non-conformist, a flatter tax is preferable.