Financing Climate Policies through Climate Bonds A Three Stage Model and Empirics

Flaherty, Michael; Gevorkyan, Aleksandr V.; Radpour, Siavash; Semmler, Willi

doi:10.2139/ssrn.2881718

Cited by 23 publications

(32 citation statements)

References 7 publications

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“…14 Scenario 1 presents business-as-usual (BAU). 15 In this case, no attempt is made toward mitigation, and 14 In our modeling procedure, we pursue simplified versions. We want to elaborate on transparent and simple scenarios and policy options, and thus we will abstain from detailed functional specifications and calibrations, as, for example, undertaken in the Nordhaus DICE model.…”

Section: Three Scenarios For the Climate Policy MIXmentioning

confidence: 99%

“…We want to elaborate on transparent and simple scenarios and policy options, and thus we will abstain from detailed functional specifications and calibrations, as, for example, undertaken in the Nordhaus DICE model. 15 The solution procedure that we use in this modeling is nonlinear model predictive control (NMPC). As described in Gruene GHG levels increase indefinitely.…”

Section: Three Scenarios For the Climate Policy MIXmentioning

confidence: 99%

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Financing Low-Carbon Transitions through Carbon Pricing and Green Bonds

Heine¹,

Semmler²,

Mazzucato³

et al. 2019

VJH

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Summary: To finance the transition to low-carbon economies required to mitigate climate change, countries are increasingly using a combination of carbon pricing and green bonds. This paper studies the reasoning behind such policy mixes and the economic interaction effects that result from these different policy instruments. We model these interactions using an intertemporal model, related to Sachs (2015), which proposes a burden sharing between current and future generations. The issuance of green bonds helps to enable immediate investment in climate change mitigation and adaptation, and the bonds would be repaid by future generations in such a way that those who benefit from reduced future environmental damage share in the burden of financing mitigation efforts undertaken today. We examine the effects of combining green bonds and carbon pricing in a three-phase model. We are using a numerical solution procedure which allows for finite-horizon solutions and phase changes. We show that green bonds perform better when they are combined with carbon pricing. Our proposed policy option appears to be politically more feasible than a green transition based only on carbon pricing and is more prudent for debt sustainability than a green transition that relies overly on green bonds.

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Section: Three Scenarios For the Climate Policy MIXmentioning

confidence: 99%

Section: Three Scenarios For the Climate Policy MIXmentioning

confidence: 99%

Financing Low-Carbon Transitions through Carbon Pricing and Green Bonds

Heine¹,

Semmler²,

Mazzucato³

et al. 2019

VJH

Self Cite

View full text Add to dashboard Cite

show abstract

“…A first option could consist of issuing "debt for investment" reserved to residents to avoid or limit speculative capital flows (Koo, 2011;Fazi and Iodice, 2016). A more radical option would be debt financing through "perpetual bonds" (Flaherty et al, 2016;Sachs, 2014), particularly suitable for financing long-term projects such as those linked to the energy transition; this would de facto constitute a debt monetization. Flaherthy et al (2016) noted that the acceptance of these securities as collateral by the central banks would make them desirable even if the market return on investment was lower than the social return.…”

Section: Rethinking Macroeconomic Policy In Secular Stagnationmentioning

confidence: 99%

The End of the Consensus? The Economic Crisis and the Crisis of Macroeconomics

Saraceno¹

2019

Revue De l'OFCE

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“…Une première option pourrait consister en l'émission d'une « dette pour l'investissement » réservée aux résidents, pour éviter ou limiter les flux de capitaux spéculatifs (Fazi et Iodice, 2016 ;Koo, 2011). Une option plus radicale serait le financement par des « titres perpétuels » (Flaherty et al, 2016 ;Sachs, 2014), particulièrement indiqués pour financer la transition énergétique, qui permettrait en fait une monétisation de facto de la dette. Flaherthy et al (2016) remarquent que l'acceptation de ces titres comme collatéral par les banques centrales les rendrait désirables même si le rendement de marché des investissements était inférieur au rendement social.…”

Section: Repenser La Politique Macroéconomique En Stagnation Séculaireunclassified

La fin du consensus ? La crise économique et la crise de la macroéconomie

Saraceno¹

2018

Revue De l'OFCE

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Le Nouveau Consensus qui a dominé la macroéconomie à partir des années quatre-vingt reposait sur une structure fondamentalement néoclas-sique : des marchés efficients qui convergent seuls à l'équilibre naturel et un rôle très limité pour la politique macroéconomique (surtout monétaire) pour lisser les fluctuations. La crise a ébranlé ce Consensus en marquant le retour en force de l'activisme budgétaire et monétaire, au moins dans le débat académique. La profession s'interroge donc sur les piliers du Consensus, allant de la taille du multiplicateur à la mise en place des réformes, en passant par les liens entre cycle et tendance. Il est encore trop tôt pour savoir à quoi ressemblera la macroéconomie de demain. Mais il faut espérer qu'elle sera plus éclectique et ouverte.

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Financing Climate Policies through Climate Bonds A Three Stage Model and Empirics

Cited by 23 publications

References 7 publications

Financing Low-Carbon Transitions through Carbon Pricing and Green Bonds

Financing Low-Carbon Transitions through Carbon Pricing and Green Bonds

The End of the Consensus? The Economic Crisis and the Crisis of Macroeconomics

La fin du consensus ? La crise économique et la crise de la macroéconomie

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