The Hidden Structure Of Energy Efficiency Finance

An Introduction to Complex Networks in Climate Finance

“…A major research question is to explain the skew we observe in the green bond syndication network of Section 3.4. This develops early research of Rickman et al in [9] and Ameli et al in [7] who also consider the effect of the fitness model of Bianconi-Barabasi [27] using the work of Pham et al on attachment functions [28].…”

“…In Ameli et al, the preferential attachment model is compared with the fitness model [7,27]. Instead of the standard method of considering attachment of new nodes based on the existing degree, nodes may attach to the existing lenders or sponsors based on the intrinsic fitness of nodes, as was proposed by Bianconi and Barabasi in the Bianconi-Barabasi model introduced in 2001 to develop the theory of competition and multiscaling in evolving networks [27].…”

“…The Nobel Prize in 2014 was awarded for the blue LED as it enables white light and a more universal employment of energy efficiency with the climate in mind [37]. Ameli et al write that "investments in energy efficiency (EE) are particularly crucial to reduce the energy demand for a growing world economy and are listed as core measures for sustainable recovery plans" [7].…”

“…They "empirically estimate the preferential attachment (PA) function and node fitnesses from observed network data" [7]. The authors suggest that there is a balance between preferential attachment and node fitness determining the evolution of their network, writing the following: "Following Pham et al approach, we measure the respective influences of the preferential attachment and the fitness models" [7,28]. The PAFit method is discussed by Pham: "Our main contributions are twofold.…”

“…Research focuses on how techniques from theoretical physics can be used to study economic systems of this type [7][8][9][10][11]. As a system of interacting human agents, economic actors form a much more sophisticated complex system than that of the interacting spins in a disordered magnetic state such as a spin glass, but the principles are the same, such as what Galton called The Law of Frequency of Error: "The huger the mob, and the greater the apparent anarchy, the more perfect is its sway" [12].…”