Carbon leakage is one of the major issues facing policymakers today when designing environmental regulation. While the empirical and trade literature on carbon leakage is rich, much less is known about the implications of carbon leakage risk on optimal regulatory policies under asymmetric...

This paper discusses the externalities and market failures in cryptocurrency markets. In particular, I highlight the significant environmental externalities created by Proof-of-Work (PoW) cryptocurrencies, the most prominent of which is Bitcoin. The main goals of this paper are to quantify these...

This paper provides quantitative evidence on the geography of regional readiness to tackle climate change using data from France, Germany, Italy, Poland, and Spain. Following Cappellano et al. (2022), we estimate a composite indicator that reports the situation of regions in these countries...

The hike in energy prices across Europe in 2022 and 2023 led to significant government interventions. Several governments introduced 'energy price cap' measures to alleviate the increased burden on households' expenditures. This paper presents an ex ante assessment of the expected distributional...

This paper studies optimal second-best corrective regulation, when some agents/activities cannot be perfectly regulated. We show that policy elasticities and Pigouvian wedges are sufficient statistics to characterize the marginal welfare impact of regulatory policies in a large class of...

Transformative Innovation Policy (TIP) has an important role in the sudden transition that our economies require to face up to today's grand challenges (climate change, sustainable development goals). In the European Union (EU), Cohesion policy funds are one of the main financing instruments to...

We document that European banks charge higher interest rates on loans granted to small and medium-sized firms located in areas at high risk of flooding. At 6 basis points, the average risk premium does not adequately reflect the deterioration of loan performance in the aftermath of flood...

When firm-level information is not available, the greenness of financial portfolios, in terms of alignment to the EU Taxonomy, and their exposure to climate-related transition risk need to be estimated with a top-down approach. We improve the accuracy of available estimates by providing...

Climate-related physical risks pose serious concerns for both public and private finances, and it is of utmost importance to contain economic losses when natural catastrophes occur. In this context, the paper models the potential economic impact of currently uninsured floods in the EU. It also...

Using lenders becoming members of the Task Force on Climate-Related Financial Disclosures (TCFD) as a plausible exogeneous shock, we examine whether and how lenders' commitment to transparent climate-related disclosures affects borrower firms' environmental performance. We find that client firms...