The E-axes Forum on Climate Change, Macroeconomics, and Finance
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Digests

Our monthly Digests are curated by economists working on climate economics. They are based on the curator’s latest research and highlight the most critical contributions to a specific subject. The Digests aim to illuminate current research and policy debates on mitigating and adapting to climate change from an economic perspective. By distilling complex academic papers into an accessible format, the Digests enable readers to efficiently keep up with this rapidly evolving research area. The series offers a reliable source of current climate economics knowledge to inform analysis and decision making.

Environmental policy in distorted markets: Regulating emissions in agricultural supply chains

Tomas Dominguez-Iino (University of Chicago) tackles the question of how to design environmental policy in an industry where Pigouvian taxation is not feasible at the externality’s source, and where pre-existing distortions show up in the form of market power.

Stock-Generated Externalities: The Principle of Targeting and Foregone Environmental Benefits

Erica Chuang (NYU) evaluates how incentives targeting either stocks of natural capital or flows of output affect the total stock of the natural resource held by the firm

Weathering the storm: sectoral economic and inflationary effects of floods and the role of adaptation

Matteo Ficarra (Geneva Graduate Institute) and Rebecca Mari (Bank of England) use satellite data on floods to estimate the impact of floods on GDP and inflation at the sector level in English counties.

Volatile Temperatures and Their Effects on Equity Returns and Firm Performance

Luca Taschini (University of Edinburg Business School, LSE) and Atreya Dey (University of Edinburg Business School) find that increased temperature variability, rather than average temperature changes, materially impacts returns and profitability for firms located in the US.

Understanding Climate Policy Stringency, Effectiveness, and Public Support

Angelika von Dulong (Humboldt University) and Achim Hagen (Humboldt University) shed light on what drives policy stringency, public support, and the effectiveness of different climate policy measures.

Warning Words in a Warming World

Emanuele Campiglio (University of Bologna, EIEE, LSE), Jerome Deyris (Sciences Po), Davide Romelli (Trinity College Dublin) and Ginevra Scalisi (Sant'Anna Pisa) present a new dataset on central banks' communication about climate change and ask what drives institutions engagement with environmental issues, how do they frame these new challenges within their existing mandates and how do financial markets respond to this expanding scope of central bank communication.

Climate news shocks and their economic impact

Maria Josè Arteaga Garavito , Riccardo Colacito , Massimiliano Mariano Croce and Biao Yang study the relationship between climate news and key economic variables, such as exchange rates, capital flows, and stock returns.

The impact of carbon pricing on firms – Causal evidence using microdata

This Research Digest, curated by Christoph Meinerding (Bundesbank), examines recent studies on carbon pricing's impact on firms, highlighting its effectiveness in reducing emissions, stimulating green investments, and influencing financial performance across various implementation phases and policy designs.

The complex interplay of climate physical risks and globalization

Richard Senner and Andrea Vismara (Complexity Science Hub) contribute to a better understanding of the transmission of physical risks across supply chains.

The Impact of Climate Litigation on Banks

Edmund Dilger (University of Cambridge Institute for Sustainability Leadership), investigates perspectives on how climate litigation is affecting banks, discussing human rights, potential legal actions related to climate risk and costs for financial institutions.

Sustainability in Capital Markets: Risk, Greenium, and Environmental Externalities

Jitendra Aswani (UCL) investigates whether there is a risk premium for environmental externalities and if there is a premium for securities issued to mitigate these externalities.

Ecosystem tipping points: Understanding risks to the economy and financial system

Lydia Marsden (UCL) introduces the concept of ecosystem tipping points and discusses challenges in modelling their socio-economic consequences.

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