We develop an ecological open-economy SFC model that enables testing cross-area interactions among productive sectors, financial markets and the ecosystem. We show that the unequal technical progress across areas, coupled with rising ecological awareness, can force governments of less...

There exists mixed evidence about the pricing of climate transition risk on financial markets. While some scholars were able to find a “brown” premium, others identified a “green” premium for stocks benefitting from the climate transition. I contribute to this debate methodologically by...