Periodic Reporting for period 1 - GREENVEST (Green Investments, Household Finances, and Local Economic Dynamics)
Période du rapport: 2024-04-01 au 2026-03-31
GREENVEST addresses the intersection of three critical global challenges: climate change mitigation, biodiversity loss, and household financial vulnerability. The project investigates how markets price nature-related risks and how financial instruments can catalyze the green transition. Drawing on environmental economics, climate science, and finance, the research examines: (1) the impact of natural capital degradation on asset valuations and municipal finances; (2) the role of green banks in mobilizing investment for clean technology; (3) how venture capital allocates resources based on emission-reduction potential; and (4) nature-enhancing interventions that improve livelihoods and environmental outcomes in vulnerable communities. The project combines empirical analysis, experimental evidence, and case study development to generate actionable insights for policymakers, financial institutions, and business strategy. By demonstrating the economic value of natural capital preservation and the financial opportunities in green transitions, GREENVEST aims to strengthen the evidence base for sustainable finance policies and corporate environmental commitments across the EU.
The project has generated four major research outputs: (1) “The Market Value of Natural Capital: Evidence from Wetland Changes and Immobile Assets”—co-authored with Ryan Lewis (University of Colorado)—shows that markets price nature-related physical risks. The empirical analysis of US wetland losses and municipal bond yields reveals that investors price in expected damages from environmental degradation, with implications for climate risk assessment and green infrastructure investment; (2) “Government-Funded Green Banks: Catalysts for the Green Transition” shows that dedicated green banking institutions effectively mobilize capital for clean technology by addressing market failures in green lending. Analysis of multiple green banks documents their leverage multipliers and role in crowding-in private capital; (3) “Emissions Reduction Potential and Early-stage Capital”—combining European and experimental evidence—demonstrates that venture capital systematically allocates higher funding to startups with greater emission-reduction potential, validating market-based incentives for climate innovation; and (4) “Restoring Nature, Creating Wealth: Evidence from Rural Households in Africa” presents novel evidence that nature-enhancing interventions in sub-Saharan Africa simultaneously improve environmental quality, household incomes, and health outcomes. Collectively, these findings establish a causal chain linking natural capital valuation, green finance mobilization, and climate-positive entrepreneurship, with actionable implications for EU sustainable finance policy and corporate environmental strategy.
The project’s results advance the state of the art in several critical areas. First, the wetlands research provides novel empirical evidence that capital markets price environmental degradation, advancing climate risk valuation methodologies used in financial regulation and portfolio management. Second, the green banks analysis demonstrates quantifiable mechanisms through which public green finance instruments achieve additionality and leverage multiplier effects, informing the design of EU sustainable finance infrastructure. Third, the venture capital findings validate market-based mechanisms for green technology innovation, offering evidence that private capital allocation incentives are naturally aligned with climate objectives—a finding with implications for innovation policy and climate finance blending mechanisms. Fourth, the African nature restoration study provides rare quantitative evidence that nature-positive interventions are not costly trade-offs but wealth-creating opportunities for vulnerable populations, challenging the dominant narrative in climate policy. Key gaps requiring further research include: (1) dynamic models linking nature-based solutions to long-term financial stability; (2) mechanisms for scaling green finance in emerging markets; (3) household-level behavioral responses to green finance incentives; and (4) integration of biodiversity metrics into corporate financial reporting standards. Successful uptake of these findings requires coordination among financial regulators (to integrate climate risk pricing into prudential frameworks), investment institutions (to scale green asset allocation), policymakers (to standardize green finance definitions), and educational institutions (to incorporate nature-finance linkages into business curricula).