In the framework of the Paris Agreement implementation, financial transfers remain a major point of negotiation for addressing equity concerns raised by the ambitious climate objectives. In complement to the theoretical, experimental and numerical studies that have examined the role of transfers...

In a structural dynamic model that incorporates two broad production sectors with different carbon emissions, we find that climate policy uncertainty (CPU) shocks (i) lower the market value of the highly carbon-emitting sector relative to the low carbon-emitting sector, and (ii) reduce real...

We document majority support for policies entailing global redistribution and climate mitigation. Recent surveys on 40,680 respondents in 20 countries covering 72% of global carbon emissions show strong support for an effective and progressive way to combat climate change and poverty: a global...

The green paradox conveys the idea that climate policies may have unintended side effects when taking into account the reaction of fossil fuel suppliers. In particular, carbon taxes that will be implemented in the future induce resource owners to extract more rapidly which increases present...

We develop a two sector incomplete markets integrated assessment model to analyze the effectiveness of green quantitative easing (QE) in complementing fiscal policies for climate change mitigation. We model green QE through an outstanding stock of private assets held by a monetary authority and...

Does a shift to ambitious climate policy increase financial fragility? In this paper, we develop a quantitative macroeconomic model with carbon taxes and endogenous financial crises to study such "Climate Minsky Moments". By reducing asset returns, an accelerated transition to net zero exerts...

This paper shows that firm credit constraints impair climate policy. Empirically, firms with tighter credit constraints, measured by their distanceto-default, exhibit a relatively smaller emission reduction after a carbon tax increase. We incorporate this channel into a quantitative DSGE model...

This paper proposes a quantitative multi-sector DSGE model with bank failure and firm default to study the interactions between bank regulation and climate policy. Households value the liquidity of deposits, which are protected by deposit insurance. Banks collect deposits and issue equity to...

The success of climate policies depends crucially on the dynamics of public support. Using unique longitudinal data from three surveys conducted between 2019 and 2022, we study the variations of public support for carbon pricing in Germany. The period includes two relevant events: the...

We study climate change in a model with a carbon-intensive and a green sector, each subject to stochastic productivity shocks, and show how the underlying economic structure affects the risk-adjusted discount rate and the climate risk premium in the social cost of carbon (SCC). Consumption...