Publication: Macro-Financial Aspects of Climate Change
Date
2020-01
ISSN
Published
2020-01
Author(s)
Feyen, Erik
Utz, Robert
Zuccardi Huertas, Igor
Bogdan, Olena
Moon, Jisung
Abstract
This paper examines the interaction
between macro-financial and climate-related risks. It brings
together different strands of the literature on
climate-related risks and how these relate to
macro-financial management and risks. Physical impacts of
climate change as well as the transition toward a resilient
low-carbon economy pose significant challenges for
macro-financial management, as they can damage the balance
sheets of governments, households, firms, and financial
institutions due to the adverse and possibly abrupt impacts
on investment and economic growth, fiscal revenue and
expenditure, debt sustainability, and the valuation of
financial assets. In turn, macro-financial risks translate
into weakened resilience to physical climate risks and
constrained capacity for climate adaptation and mitigation
efforts. The paper finds that many countries face the
"double jeopardy" of simultaneous elevated
climate-related and macro-financial risks. Reducing
macro-financial risks in countries under double jeopardy is
an important component of international efforts to tackle
climate change to complement and support country-specific efforts.
Citation
“Feyen, Erik; Utz, Robert; Zuccardi Huertas, Igor; Bogdan, Olena; Moon, Jisung. 2020. Macro-Financial Aspects of Climate Change; Macro-Financial Aspects of Climate Change. Policy Research Working Paper;No. 9109. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/6721ca7f-f426-5756-ac00-0bec2d25f892 License: CC BY 3.0 IGO.”
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