Project description
When financial regulations go green
There is a link between climate change and financial activity. The 2015 Paris Climate Conference called for green finance initiatives. It is possible to reduce carbon emissions by harnessing the power of financial regulation. The EU-funded ClimateFinReg project will study the link between financial stability regulations and companies’ incentives to reduce their carbon footprints. Specifically, the project’s work is based on emerging literature about contagion in financial networks. By exploring how uncertainty about the effects of climate change affects the decision processes of legislators and regulators, the project will identify the impact of climate change shocks to the financial system. It will also explore its implications for climate change mitigation and financial regulation.
Objective
Climate change is one of the most pressing problems of humanity. And yet the carbon emissions have not decreased but increased since 2006. The present project presents a novel approach to achieve a global reduction of carbon emissions in the coming decades by harnessing the power of financial regulation. We will concentrate on the challenges to make this approach work, as well as on the opportunities it presents, to achieve a practical solution for this extremely difficult problem. We argue that financial stability regulation is sufficiently powerful to change the incentives for firms and reduce significantly their carbon footprints.
The substance of the argument starts from the observation that financial systems are increasingly interconnected. This increasing interconnection has led regulators to give a larger role to a macroprudential approach in their activities. That is, they intend to reduce risks to the whole financial system, what they call “systemic risks,” rather than simply risks to individual institutions.
Our work stems from a large emerging literature about contagion in financial networks, and will explore its implications for climate change mitigation and financial regulation. The substance of this project is to answer a series of questions about the viability and desirability of this policy. It will be structured around three work packages. WP1, will analyse the expected distribution of shocks that arises from climate change. It will also study their impact to the financial system. The other two works packages will explore two key determinants of adoption of the policy. In WP2 we explore the impact of the large uncertainty about the effects of climate change on the mindset of regulators. In WP3 we study the transmission of social attitudes and social norms into the decision processes of legislators and regulators.
Fields of science (EuroSciVoc)
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.
- natural sciences earth and related environmental sciences atmospheric sciences climatology climatic changes
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Keywords
Project’s keywords as indicated by the project coordinator. Not to be confused with the EuroSciVoc taxonomy (Fields of science)
Project’s keywords as indicated by the project coordinator. Not to be confused with the EuroSciVoc taxonomy (Fields of science)
Programme(s)
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
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H2020-EU.1.3. - EXCELLENT SCIENCE - Marie Skłodowska-Curie Actions
MAIN PROGRAMME
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H2020-EU.1.3.2. - Nurturing excellence by means of cross-border and cross-sector mobility
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Topic(s)
Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Funding Scheme
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
MSCA-IF - Marie Skłodowska-Curie Individual Fellowships (IF)
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Call for proposal
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
(opens in new window) H2020-MSCA-IF-2019
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Net EU financial contribution. The sum of money that the participant receives, deducted by the EU contribution to its linked third party. It considers the distribution of the EU financial contribution between direct beneficiaries of the project and other types of participants, like third-party participants.
28903 Getafe (Madrid)
Spain
The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.