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Journal articles on the topic 'Physical climate risks'
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Swart, Rob. "Assessing physical climate risks for investments: A risky promise." Climate Services 14 (April 2019): 15–18. http://dx.doi.org/10.1016/j.cliser.2019.04.001.
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Lepore, Caterina. "Global Economic Impacts of Physical Climate Risks." IMF Working Papers 2023, no. 183 (September 2023): 1. http://dx.doi.org/10.5089/9798400254147.001.
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Cortina, Magdalena, and Carlos Madeira. "Exposures to climate change's physical risks in Chile." Latin American Journal of Central Banking 4, no. 2 (June 2023): 100090. http://dx.doi.org/10.1016/j.latcb.2023.100090.
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EDITH GINGLINGER. "Climate risk and finance." Bankers, Markets & Investors 160, no. 1 (June 4, 2020): 44–50. http://dx.doi.org/10.54695/bmi.160.10.
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Climate risks, whether physical risks or transition risks, represent an increasingly important issue for companies, bankers and institutional investors. This article provides a review of the recent literature on the relationship between climate risks and finance. It examines institutional investors’ perceptions of climate risks and reports findings on the impact of climate risks on the value of real estate, debt and equity.
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COURQUIN, VALENTIN. "Impacts of the Evolution of Physical Climate Risks on European Business Activities: the case of construction sector." Bankers, Markets & Investors 178, no. 3 (December 1, 2024): 0025. https://doi.org/10.54695/bmi.178.0025.
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Nowadays, the constant increase in the intensity and frequency of extreme weather events, attributed to climate change, is exerting growing pressure on companies across various sectors. These businesses are becoming increasingly vulnerable to diverse physical climate risks. Changes in regulatory frameworks regarding the identification, management, and communication of climate risks are further encouraging companies to adopt a proactive approach in assessing these risks. This study, employing an innovative methodology, demonstrates how risk management professionals can leverage currently available climate data to identify climate risks that have the most impact on their performance indicators. We illustrate this methodology by applying it to the construction production sector in France.
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Agarwala, Matthew, Matt Burke, Patrycja Klusak, Kamiar Mohaddes, Ulrich Volz, and Dimitri Zenghelis. "CLIMATE CHANGE AND FISCAL SUSTAINABILITY: RISKS AND OPPORTUNITIES." National Institute Economic Review 258 (2021): 28–46. http://dx.doi.org/10.1017/nie.2021.37.
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Both the physical and transition-related impacts of climate change pose substantial macroeconomic risks. Yet, markets still lack credible estimates of how climate change will affect debt sustainability, sovereign creditworthiness and the public finances of major economies. We present a taxonomy for tracing the physical and transition impacts of climate change through to impacts on sovereign risk. We then apply the taxonomy to the UK’s potential transition to net zero. Meeting internationally agreed climate targets will require an unprecedented structural transformation of the global economy over the next two or three decades. The changing landscape of risks warrants new risk management and hedging strategies to contain climate risk and minimise the impact of asset stranding and asset devaluation. Yet, conditional on action being taken early, the opportunities from managing a net zero transition would substantially outweigh the costs.
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Downes, Stephanie M., Amy Steel, Enrico Favaro, and Michael Wood. "Disruption and damages: climate-related risks to the Australian oil and gas sector." APPEA Journal 61, no. 2 (2021): 395. http://dx.doi.org/10.1071/aj20145.
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The oil and gas (O&G) sector has made significant commitment to reduce greenhouse gas emissions by decarbonising operations and transitioning portfolios to lower-carbon products. However, assessing the impacts of physical climate risks on assets and value chains has remained a lower priority, despite climate change consistently rated the highest risk to the global economy. Here we present selected case studies of the most relevant physical climate risks that impact key infrastructure across the O&G sector, now and in the future, with and without global abatement (that is, in high and low emissions scenarios). We focus on physical climate risks including sea level rise impacts on an offshore processing region, flooding and drought impacts in an onshore processing region, and highlight supply chain impacts on shipping and ports due to climate extremes such as cyclones. These risks all have the potential to have significant and adverse impacts on Australia’s O&G sector and have a direct impact on the ability of the sector to transition to a low-carbon future. We conclude with an overview of why and how companies should undertake climate scenario analysis for physical risks, in alignment with the Task Force on Climate-related Financial Disclosures.
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Ewald, Christian Oliver, Chuyao Huang, and Yuyu Ren. "On the Effects of Physical Climate Risks on the Chinese Energy Sector." Journal of Risk and Financial Management 17, no. 10 (October 9, 2024): 458. http://dx.doi.org/10.3390/jrfm17100458.
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We examine the impact of physical climate risks on energy markets in China, distinguishing between traditional energy and new energy stock markets, and the energy commodity market, utilizing a time-varying parameter vector autoregressive model with stochastic volatility (TVP-SV-VAR). Specifically, we investigate the dynamic effects of five specific subtypes of physical climate risks, namely waterlogging by rain, drought, typhoon, cryogenic freezing, and high temperature, on WTI oil prices and coal prices. The findings reveal that these physical climate risks exhibit time-varying similar effects on the returns of traditional energy and new energy stocks, but heterogeneous effects on the returns of WTI oil prices and coal prices. Finally, we categorize and examine the impact of both acute and chronic physical risks on the energy commodity market.
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Harker, Callan, Maureen Hassall, Paul Lant, Nikodem Rybak, and Paul Dargusch. "What Can Machine Learning Teach Us about Australian Climate Risk Disclosures?" Sustainability 14, no. 16 (August 12, 2022): 10000. http://dx.doi.org/10.3390/su141610000.
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There seems to be no agreed taxonomy for climate-related risks. The information in firms’ climate risk disclosures represents a new resource for identifying the priorities and strategies of Australian companies’ management of climate risk. This research surveys 839 companies listed on the Australian Stock Exchange for the presence of climate risk disclosures, identifying 201 disclosures on climate risk. The types of climate risks and the risk management strategies were extracted and evaluated using machine learning. The analysis revealed that Australian firms are focused on acute physical climate risks, followed by market and regulatory risks. The predominant management strategy for these risks was to use a risk reduction approach, rather than avoiding or transferring risk. The analysis showed that key Australian industry sectors, such as materials, banking, insurance, and energy are focusing on different mixtures of risk types, but they are all primarily managing risks through risk-reduction strategies. An underlying driver of climate risk disclosure was composed of the financial implications of climate risk, particularly with respect to acute physical risks. The research showed that emission reductions represent a primary consideration for Australian firms in their disclosures identifying how they are responding to climate risk. Further research using machine learning to evaluate climate risk disclosure should focus on analysing entire climate risk reports for key topics and trends over time.
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Putri, Wika Harisa, Irfan Bakhtiar, and Ni Luh Ayounik Mahasabha. "Mitigating physical climate risks: ESG budgeting approaches as risk boundaries for companies." BIO Web of Conferences 155 (2025): 08005. https://doi.org/10.1051/bioconf/202515508005.
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Physical climate risks are currently an urgent concern for companies. Many still consider this risk part of operational risk and manage it by transferring it to third parties. However, this method is still used to calculate the potential loss of assets due to physical climate risks. This paper explores ongoing literature and publications to address mitigating physical climate risk, and finds that companies increasingly turn to ESG budgeting approaches as a more comprehensive tool for managing direct and indirect physical climate risks. This study aims to synthesize the current literature and present a definition of ESG budgeting. This article will explore the various concerns regarding ESG budgeting and provide a technical overview of how companies manage and disclose these risks in their corporate statements. As a conceptual paper, no data was collected to provide empirical evidence to support ESG budgeting practices; instead, the concept of ESG-related cost or sustainable budget tagging was described. Technical steps are needed by companies, especially for those who still understand ESG in the initial phase. Apart from concerns about budget allocations that will increase, doubts that ESG spending will directly impact company financial performance are strong in implementing ESG in companies. This exploration found that the clear concept of ESG budgeting or ESG budget tagging is still rare and needs advanced discussion. A supportive ecosystem, a strong tone from the top and adequate ESG literacy are needed to ensure companies' readiness to mitigate physical climate risks.
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Boitan, Iustina Alina, and Wafaa Shabban. "Exploratory Assessment of the European Union Contries’ Climatic Profile." Review of Finance and Banking 16, no. 1 (June 30, 2024): 137–60. http://dx.doi.org/10.24818/rfb.23.16.01.10.
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The paper subscribes to the broad strand of literature that examines the inter- play between banking activity and climate risk, by particularly focusing on identifying and classifying European Union countries into similar, homogenous groups based on their intrin- sic pattern related to climate vulnerability and readiness to cope with the negative effects of natural disasters. By applying an unsupervised learning clustering algorithm on a novel input dataset comprising six proxy indicators for the physical risk associated with climate challenges, we reveal the climate profile of the EU countries. A direct implication of our findings consists of ascertaining which banking systems are more exposed to environmen- tal risks arising from physical sources in the home country they headquarter or in the host countries envisaged for the conduct of transnational financial activity. Results indicate that the least vulnerable EU countries to physical risks, being at the same time best performers in the process of climate risk adaptation, prevention, and management are Denmark, Lux- embourg, Germany, Sweden, and Finland. Hence, their banking systems are less exposed to the adverse consequences of the physical risks. In contrast, banks operating in Bulgaria, Croatia, Poland, and Romania are the most exposed to the ripple effects of these risks, due to countries’ increased vulnerability to climate risk and to the low degree of performance in implementing climate policies.
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Noussia, Kyriaki, and Georgios Nousias. "Pandemics and Climate Change as Systemic Risks: Law, Policy, Insurance, Physical Activity and Exercise as Mitigating Environmental Degradation Mechanisms." European Energy and Environmental Law Review 33, Issue 1 (January 1, 2024): 28–34. http://dx.doi.org/10.54648/eelr2023022.
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Climate change and the Covid-19 pandemic have been classified as systemic risks and have elaborated that such systemic risks will become the new normal. Ways to tackle the long-term effects of climate change include law and environmental policy. In addition, insurance can help mitigate the burden placed on governments when such systemic risks occur, including pandemics. In relation to the Covid-19 pandemic and the effects of long-Covid, sports and exercise are examined as a mitigating factor able to release pressure from public health and help mitigate its long-term effects. This article discusses the correlation of Covid-19 with environmental changes and climate changes and goes on to address the role of insurance, on the one hand and sports and exercise on the other hand as mitigating mechanisms to handle systemic risks such as climate change and pandemics. The article’s findings suggest and conclude that 1) outside state action (law and policy), private action such as change in lifestyle towards a more sustainable way of life, and sports and exercise can help with the long-term effects of pandemics and 2) insurance can act as a mitigating private sector mechanism. Governments should integrate law, policy, and mitigating techniques such as private insurance to tackle and respond to systemic risks. climate change, Covid-19, systemic risks, insurance, physical exercise, mitigation for climate change, mitigation, public health
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Sokolova, Y. D. "Russian exports amid geopolitical instability: The case of physical and transitional climate risks." Voprosy Ekonomiki, no. 11 (November 5, 2024): 53–75. http://dx.doi.org/10.32609/0042-8736-2024-11-53-75.
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The paper examines the impact of physical and transitional climate risks, which to some extend shape the geopolitical situation in the world, on Russian exports. The gravity model of international trade was employed to model the existing relationship. Estimation of the gravity equation by means of the Poisson Pseudo Maximum Likelihood (PPML) method using data on Russian export flows to 72 countries over the period 2010—2021 revealed that climate change and the ambitions of trading partner states towards low-carbon development determine the dynamics of Russian exports. In particular, national physical climate risks have a detrimental impact on Russia’s exports due to the destruction of infrastructure, loss of capital, reduced quality and availability of natural resources, and increased social tensions. Extreme climatic events and climate change measures in trading partner countries spur the development of Russian exports. Namely, physical climate risks of importing countries may increase the demand for key Russian goods for economic recovery purposes. Changes during the transition to a low-carbon economy in trading partner countries also generate opportunities for Russian export growth due to the country’s role as a major supplier of energy and mineral products, as well as technologies for the alternative energy production and electrification of transport
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Makarov, I. A., and A. A. Shuranova. "Climate Change as a New Factor of International Relations." Journal of International Analytics 14, no. 4 (March 25, 2024): 52–74. http://dx.doi.org/10.46272/2587-8476-2023-14-4-52-74.
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This article explores the escalating impact of climate change and the global green transition on international relations, particularly in the aftermath of the Paris Agreement in 2015. While physical risks stemming directly from climate change consequences are a concern, the rise of transition risks associated with the global green shift poses significant threats to societies, political systems, and economies. The current emissions reduction targets outlined in the Paris Agreement are deemed inadequate to address the mounting physical risks, underscoring the imperative of enhancing states’ climate security. Transition risks are intricately linked to the fragmentation of global politics, driven by varying climate ambitions and disagreements on decarbonization methods among states. Fault lines emerge based on factors such as fossil fuel abundance, states’ positions in energy geopolitics, socio-economic development levels, utilization of green transition opportunities, and participation in international climate agreements. In this context, Russia confronts numerous risks, compelling the nation to articulate and advocate its unique vision of decarbonization while fostering alliances with non-Western states in this critical domain.
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Leal Filho, Walter, Abul Al-Amin, Gustavo Nagy, Ulisses Azeiteiro, Laura Wiesböck, Desalegn Ayal, Edward Morgan, et al. "A Comparative Analysis of Climate-Risk and Extreme Event-Related Impacts on Well-Being and Health: Policy Implications." International Journal of Environmental Research and Public Health 15, no. 2 (February 13, 2018): 331. http://dx.doi.org/10.3390/ijerph15020331.
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There are various climate risks that are caused or influenced by climate change. They are known to have a wide range of physical, economic, environmental and social impacts. Apart from damages to the physical environment, many climate risks (climate variability, extreme events and climate-related hazards) are associated with a variety of impacts on human well-being, health, and life-supporting systems. These vary from boosting the proliferation of vectors of diseases (e.g., mosquitos), to mental problems triggered by damage to properties and infrastructure. There is a great variety of literature about the strong links between climate change and health, while there is relatively less literature that specifically examines the health impacts of climate risks and extreme events. This paper is an attempt to address this knowledge gap, by compiling eight examples from a set of industrialised and developing countries, where such interactions are described. The policy implications of these phenomena and the lessons learned from the examples provided are summarised. Some suggestions as to how to avert the potential and real health impacts of climate risks are made, hence assisting efforts to adapt to a problem whose impacts affect millions of people around the world. All the examples studied show some degree of vulnerability to climate risks regardless of their socioeconomic status and need to increase resilience against extreme events.
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Ben-Salha, Ousama, Mourad Zmami, Sami Sobhi Waked, Bechir Raggad, Faouzi Najjar, and Yazeed Mohammad Alenazi. "Assessing the Impacts of Transition and Physical Climate Risks on Industrial Metal Markets: Evidence from the Novel Multivariate Quantile-on-Quantile Regression." Atmosphere 16, no. 2 (February 18, 2025): 233. https://doi.org/10.3390/atmos16020233.
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Climate change and global warming have been shown to increase the frequency and intensity of extreme weather events. Concurrently, substantial efforts are being directed toward fostering the transition to a low-carbon economy. These concurrent trends result in the emergence of both physical and transition climate risks. This study investigates the impacts of climate risks, both physical and transition, on the return of major industrial metals (aluminum, copper, iron, lead, tin, nickel, and zinc) between January 2005 and December 2023. Employing the novel multivariate quantile-on-quantile regression (m-QQR) approach, this study examines how climate risks affect metal markets under different market conditions and risk levels. The results reveal that transition risks exert a more significant adverse impact on metal returns during bearish markets conditions, particularly for metals linked to high-emission industries, while physical risks affect metal returns across a wider range of quantiles, often increasing volatility during extreme market conditions. Furthermore, copper and nickel, both of which are crucial for renewable energy development, demonstrate resilience at higher quantiles, highlighting their role in the transition to a low-carbon economy. Finally, these two metals may serve as effective hedges against losses in other metals that are more vulnerable to transition risks, like aluminum and lead.
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Oura, Hiroko, Fabian Lipinsky, Stephane Hallegatte, Paola Morales, Nicola Ranger, Martijn Gert Jan Regelink, and Henk Jan Reinders. "Bank Stress Testing of Physical Risks under Climate Change Macro Scenarios: Typhoon Risks to the Philippines." IMF Working Papers 2022, no. 163 (August 2022): 1. http://dx.doi.org/10.5089/9798400217258.001.
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Hebsiba beula, D., S. Srinivasan, and C. D. Nanda Kumar. "PREDICTION OF CLIMATE CHANGE USING ARIMA MODEL." YMER Digital 20, no. 12 (December 11, 2021): 230–45. http://dx.doi.org/10.37896/ymer20.12/21.
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The climate and weather system prediction has always attracted interest. Climate change risks including physical risks, liability risks and transition risks, it’s directly affecting the insurance industry. Climate change is majorly affecting the insurance sector; they are such as extreme heat during summer and extreme rainfall (Flood). It affects both insurance and reinsurance sector. Constructing the model is a necessary process but choosing the model which suits our data is very necessary. In those days the weather reports telecast in news but now even our smart phone notified the weather. In this paper study the climate prediction algorithms using R and also using Cost-free R language tool to forecast the climate using time ARIMA model for the Indian climate.
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Howarth, Candice, Sian Morse-Jones, Andrew Kythreotis, Katya Brooks, and Matt Lane. "Informing UK governance of resilience to climate risks: improving the local evidence-base." Climatic Change 163, no. 1 (August 10, 2020): 499–520. http://dx.doi.org/10.1007/s10584-020-02821-3.
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AbstractInternational assessments of evidence on climate change (e.g. Intergovernmental Panel on Climate Change, IPCC) or national climate change risk assessments (e.g. UK Climate Change Risk Assessment, CCRA) do not offer a sufficiently granular perspective on climate impacts to adequately inform governance of resilience to climate risks at the local level. Using an analysis of UK decision-makers managing and responding to heatwaves and flood risks, this paper argues how more robust local evidence is needed to inform decision-making regarding adaptation options for enhancing local resilience. We identify evidence gaps and issues relating to local climate change impacts, including sources and quality of evidence used, adequacy and accessibility of evidence available, ill-communicated evidence and conflicting or misused evidence. A lack of appreciation regarding how scientific evidence and personal judgement can mutually enhance the quality of decision-making underpins all of these gaps. Additionally, we find that the majority of evidence currently used is reductively based upon socio-economic and physical characteristics of climate risks. We argue that a step change is needed in local climate resilience that moves beyond current physical and socio-economic risk characterisation to a more inclusive co-constitution of social and politically defined climate risks at the local scale that are better aligned with the local impacts felt and needs of stakeholders.
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Teale, Natalie, and Steven M. Quiring. "Conducting Climate Change Risk Assessments for Companies: Lessons Learned." Bulletin of the American Meteorological Society 103, no. 12 (December 2022): E2836—E2844. http://dx.doi.org/10.1175/bams-d-21-0339.1.
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Abstract As the private sector becomes increasingly aware of the risks associated with climate change, climatologists have been engaging with companies to assess climate change risks and opportunities. Here, we outline how we have collaborated with a Fortune 500 company to assess the physical risks of climate change to their facilities. We provide a template for a climate change report card that we generated for >100 facilities globally. This report card is designed to communicate risk to company leadership and local facility managers. We believe that by sharing our experiences, climate scientists will be able to quantify and communicate climate risk more effectively to the private sector.
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Yusuf, Jamiu Adeniyi, Sikiru Okunlade Araoye, and Lukman Olajide Afolabi. "The Impact of Climate Change Risks on International Financial Markets and Investment Strategies." Journal of Environment, Climate, and Ecology 1, no. 2 (September 24, 2024): 1–8. https://doi.org/10.69739/jece.v1i2.113.
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Climate change has become a crucial global issue affecting both the environment and financial markets. As noted by the Intergovernmental Panel on Climate Change (IPCC), the increased frequency and severity of extreme weather events, sea-level rise, and changing precipitation patterns present significant risks to the stability of international financial systems. Moreover, efforts to reduce carbon emissions and promote sustainable practices are reshaping investment landscapes, requiring investors to incorporate climate risks into their strategies. This research explores the integration of climate risks into financial decision-making by examining the impacts of both physical risks—stemming from direct climate events—and transition risks—resulting from the shift to a low-carbon economy and regulatory changes. Employing quantitative methods such as Vector Auto regression (VAR), Autoregressive Distributed Lag (ARDL), and Panel Data Analysis, the study analyzes the effects of climate change on international financial markets and investment strategies. The findings reveal significant long-term and short-term impacts of climate risks on asset valuations, investor behavior, and market dynamics. By providing insights into the materiality of climate risks, this study contributes to the development of effective risk management strategies and promotes sustainability in financial practices.
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Muzuva, Meshel, and Daniel Muzuva. "The impact of climate change on banks loan portfolios and strategies for effective climate risk management." International Journal of Research in Business and Social Science (2147- 4478) 13, no. 6 (October 14, 2024): 148–57. http://dx.doi.org/10.20525/ijrbs.v13i6.3510.
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As extreme weather events continue to impact every continent and the world moves towards establishing a lower-carbon economy, the banking industry is expected to incorporate climate risk into their risk management practices. Climate change poses significant risks to bank loan portfolios through increased physical and transition risks. This study systematically analysed the literature to identify effective strategies for managing these risks. Our findings reveal that climate-related events can lead to substantial loan defaults and credit losses. To mitigate these impacts, banks can integrate climate risk into their risk management frameworks, adopt sustainable lending practices, and diversify their portfolios. Some banks have already implemented measures to mitigate climate risk through insurance policies, while others are incorporating sustainability criteria into their lending practices, such as financing green projects. By proactively addressing climate risks, banks can protect their portfolios, enhance financial resilience and contribute to a low-carbon economy.
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Myklebust, Trude. "Climate-related Financial Risks: Considering an Emerging Framework for Assessment and Disclosure in a Regulatory Perspective." European Business Law Review 33, Issue 3 (April 1, 2022): 443–62. http://dx.doi.org/10.54648/eulr2022020.
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Climate-related financial risks have become a crucial concern in financial policymaking. This recent development is propelled by concerns that financial markets have underestimated, and are unprepared for, the costs and losses that will follow as the effects of climate change escalate. It is also driven by the enormous scale of investments required to facilitate the transition to a low-emission society. The Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) are one example of a response to these developments in the realm of financial policymaking. They aim to encourage disclosure of climate-related risks, by introducing new categories of risk – namely, physical risk and transition risk. This article examines the new categorization of risks and discusses both its integration into non-binding reporting guidelines in the European context and its potential for broader adoption. Climate-related financial risk, Action Plan on Financing Sustainable Growth, ESG, TCFD, physical risk, transition risk, non-financial reporting, responsible investment
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Schneider, Sven, Alexandra von Winning, Fiona Grüger, Stefan Anderer, Robert Hoffner, and Lilian Anderson. "Physical Activity, Climate Change and Health—A Conceptual Model for Planning Public Health Action at the Organizational Level." International Journal of Environmental Research and Public Health 19, no. 8 (April 12, 2022): 4664. http://dx.doi.org/10.3390/ijerph19084664.
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Climate change is linked to health risks for both professional and amateur athletes. Sports organisations will need to react to these developments. The starting point for this concept paper is a summary of the sport-specific health risks currently under discussion: increasing heatwaves, growing numbers of extreme weather events, rising UV, ozone and allergen levels and the spread of infectious diseases. Based on the current state of research, a conceptual model is developed to reduce these climate-related health risks in sports at organisational level. Given the wide variety of predicted direct and indirect health risks linked to climate change, the “sports, clubs and climate change model” (SC3 model) presented here follows a stepwise risk-specific approach using technical, organisational and person-related measures. The SC3 model also includes cross-cutting measures that have an overarching effect comprising training, warning systems, coordination and evaluation measures. The SC3 model makes it possible to develop prevention plans, both at national level for central associations and at the regional level of local organisations and clubs. It can be applied to typical settings (e.g., training or competition at elite or amateur levels) and target groups (e.g., athletes, spectators, referees and club officials).
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Martin, Vesna. "Climate changes: Economic impact and implication." Ekonomski pogledi 22, no. 2 (2020): 51–71. http://dx.doi.org/10.5937/ekopog2002051m.
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Climate changes nowadays present a topic of huge importance taking into account its influence on conducting monetary and fiscal policy, achieving and improving financial stability, but also it is a concern for regulators and supervisors. In order to have an appropriate reaction, it is necessary to identify risk from climate changes in a timely manner. Three categories of climate-related risks can be identified: 1) physical risks which are associated with more frequent severe weather events and permanent changes in the environment, 2) transition risks that represent the policies and technological changes needed to achieve a greener economy and 3) liability risk which represents the impacts that could arise tomorrow if parties who have suffered loss or damage from the effects of climate change seek compensation from those they hold responsible. As a way to achieve satisfactory results in the fight against climate change risks, the financial institutions developed climate change risk management approaches, which include a variety of methods and instruments. The aim of this paper is the presentation of impact and implication regarding climate change regulations, identification of the risks and its management approaches, as well as economic cost and proposals for future action.
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Siregar, Inova Fitri, Tubagus Ismail, Muhamad Taqi, and Nurhayati Soleha. "The Impact of Climate Related Risks on Financial Stability: A Global Economic and Financial Perspectives." International Journal of Energy Economics and Policy 15, no. 1 (December 22, 2024): 507–12. https://doi.org/10.32479/ijeep.17387.
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Studies related to the influence of climate risk on financial stability have been conducted, but rarely explore the gap of how climate change, both from the transition risk, physical risk, and opportunities derived from the efficiency of resources and energy sources needed for the company. Climate-related risks have not been empirically explored or discussed to date. Institutional theory is employed to determine what factors affect the financial stability gap regarding climate-related risks. The test was conducted quantitatively with 548 samples, where the data was collected from the data of companies listed on the Indonesia Stock Exchange. The results exhibited that climate-related risk harms financial stability, while size is able to mediate the relationship between climate-related risk and financial stability. The results display increased adaptation costs or losses due to climate change, such as costs incurred to mitigate climate-related transition risks in technology, reputation, markets, and policies and regulations. The practical implication of these results is that companies must implement proactive measures to manage climate-related risks. Companies, particularly those in sectors vulnerable to climate change, such as mining, agriculture, or manufacturing, must administer resources to mitigate the negative impacts of climate risks. Meanwhile, small companies can consider cooperation and collaboration to improve their operations, which may strengthen their financial stability in facing risks.
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Drouet, Laurent, Valentina Bosetti, Simone A. Padoan, Lara Aleluia Reis, Christoph Bertram, Francesco Dalla Longa, Jacques Després, et al. "Net zero-emission pathways reduce the physical and economic risks of climate change." Nature Climate Change 11, no. 12 (November 29, 2021): 1070–76. http://dx.doi.org/10.1038/s41558-021-01218-z.
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Moulton, Robert J., and John F. Kelly. "The physical risks of reforestation as a strategy to offset global climate change." Critical Reviews in Environmental Science and Technology 27, sup001 (November 1997): 245–57. http://dx.doi.org/10.1080/10643389709388523.
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Han, Mengran. "The Mechanism of Green Finance to Prevent the Risks Brought by Climate Change to Economic Development." Highlights in Business, Economics and Management 45 (December 24, 2024): 1–5. https://doi.org/10.54097/x0g0ny97.
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Nowadays, environmental issues have become one of the important factors affecting economic development. Green financing is crucial to the green and sustainable development that nations are becoming more and more focused on. Global warming has a negative impact on economic development, such as frequent extreme weather, sea level rise, etc., and these physical risks will eventually be converted into financial risks. Green finance can guide more resources to the green and low-carbon field, adjust carbon prices, and promote establishing a carbon emission trading market. At the same time, green finance directly links the physical risks in the environment with financial risks. This article summarizes relevant research on how green finance can prevent financial risks caused by climate change. It mainly analyzes the prevention of financial risks caused by green finance from three aspects. Green finance prevents relevant risks by promoting policy and market innovation, enhancing climate resilience, and promoting low-carbon transformation. It identifies the constraints of the existing research and development of green finance under the current circumstances by talking about the effect mechanism of green finance.
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Schäfer, Stefan, and Sean Low. "Asilomar moments: formative framings in recombinant DNA and solar climate engineering research." Philosophical Transactions of the Royal Society A: Mathematical, Physical and Engineering Sciences 372, no. 2031 (December 28, 2014): 20140064. http://dx.doi.org/10.1098/rsta.2014.0064.
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We examine the claim that in governance for solar climate engineering research, and especially field tests, there is no need for external governance beyond existing mechanisms such as peer review and environmental impact assessments that aim to assess technically defined risks to the physical environment. By drawing on the historical debate on recombinant DNA research, we show that defining risks is not a technical question but a complex process of narrative formation. Governance emerges from within, and as a response to, narratives of what is at stake in a debate. In applying this finding to the case of climate engineering, we find that the emerging narrative differs starkly from the narrative that gave meaning to rDNA technology during its formative period, with important implications for governance. While the narrative of rDNA technology was closed down to narrowly focus on technical risks, that of climate engineering continues to open up and includes social, political and ethical issues. This suggests that, in order to be legitimate, governance must take into account this broad perception of what constitutes the relevant issues and risks of climate engineering, requiring governance that goes beyond existing mechanisms that focus on technical risks. Even small-scale field tests with negligible impacts on the physical environment warrant additional governance as they raise broader concerns that go beyond the immediate impacts of individual experiments.
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Mashara, Janet Naisoi, Mercy Thuranira, and Fridah Kathambi. "Health Risks of Climate Change and Variability to Maternal Health." International Journal of Research and Innovation in Social Science VIII, no. IX (2024): 2531–40. http://dx.doi.org/10.47772/ijriss.2024.8090210.
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Climate change has emerged as a significant global challenge with far-reaching implications to human health. Through a comprehensive review of scholarly articles, the study examines the complex interplay between climate change and maternal health and highlights the role of religion in climate change mitigation. Mothers play an integral role in creating and sustaining healthy households. Furthermore, improving maternal health is essential to achieving global sustainable development goals, particularly goal 3 (Good Health and Well-being). The paper sought to examine the physical and psychosocial effects of climate change on expectant mothers. The study explored the following objectives: the direct impacts of climate change on maternal health; Indirect impacts of climate change on maternal; and mitigation strategies. The study revealed that, rising temperatures and heatwaves increase maternal heat-related illnesses, potentially affecting birth outcomes. Vector-borne diseases, influenced by climate shifts, pose additional threats to maternal well-being. Environmental stressors, including natural disasters and climate-related migration, contribute to maternal stress, anxiety and depression affecting maternal care. Christian teachings acknowledge human life as precious and sacred. It should be protected and valued from conception until death. Religious beliefs and values lay emphasis on stewardship of the environment, social justice, compassion, and community support. Religious institutions and leaders can play pivotal roles in advocating for climate action, promoting sustainable practices, and providing psychosocial support to individuals and families affected by climate-related health issues. To effectively combat climate change effects, the study recommends that it is imperative to embrace integrated approaches that prioritize healthcare access, environmental resilience, mental health support, and community-based initiatives that integrate religious perspectives with scientific knowledge and best practices.
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Onyeka Chrisanctus Ofodile, Adedoyin Tolulope Oyewole, Chinonye Esther Ugochukwu, Wilhelmina Afua Addy, Omotayo Bukola Adeoye, and Chinwe Chinazo Okoye. "Predictive analytics in climate finance: Assessing risks and opportunities for investors." GSC Advanced Research and Reviews 18, no. 2 (February 28, 2024): 423–33. http://dx.doi.org/10.30574/gscarr.2024.18.2.0076.
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Predictive analytics is increasingly recognized as a pivotal tool in climate finance, offering investors invaluable insights into both the risks posed by climate change and the opportunities for sustainable investment. This Review delves into the burgeoning field of predictive analytics within climate finance, emphasizing its significance in aiding investors to navigate the multifaceted landscape of climate-related risks and opportunities. By leveraging advanced data analytics techniques, predictive analytics empowers investors to anticipate and mitigate climate-related risks, ranging from physical risks such as extreme weather events and sea-level rise to transition risks associated with regulatory changes and technological shifts. Moreover, predictive analytics enables investors to identify emerging opportunities in sectors poised for sustainable growth, such as renewable energy, clean technology, and climate resilient infrastructure. This Review also sheds light on the methodologies and data sources utilized in predictive analytics for climate finance, encompassing climate models, satellite imagery, socioeconomic indicators, and financial data. Through the analysis of historical trends and future projections, predictive analytics provides investors with actionable insights to inform their investment decisions and align their portfolios with climate-related goals and mandates. Despite its potential benefits, the adoption of predictive analytics in climate finance is not without challenges. This Review examines the hurdles associated with data quality, model uncertainty, regulatory complexities, and the integration of climate-related factors into financial decision-making processes. Addressing these challenges necessitates interdisciplinary collaboration, robust risk assessment frameworks, and ongoing innovation in predictive analytics methodologies. In conclusion, this Review underscores the critical role of predictive analytics in climate finance and its transformative potential in enhancing the resilience and sustainability of investment portfolios. By harnessing the power of data-driven insights, investors can proactively manage climate-related risks, capitalize on sustainable investment opportunities, and contribute to the transition towards a low-carbon economy. As climate change continues to exert profound impacts on financial markets, the integration of predictive analytics represents a strategic imperative for investors seeking to navigate the evolving landscape of climate finance effectively.
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Brunetti, Celso, Benjamin Dennis, Gurubala Kotta, and Adam Smith. "Analyzing State Resilience to Weather and Climate Disasters." FEDS Notes, no. 2023-09-07 (September 2023): None. http://dx.doi.org/10.17016/2380-7172.3342.
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The National Oceanic and Atmospheric Administration (NOAA) reports that climate change is increasing the frequency of extreme conditions that lead to disasters such as droughts, hurricanes, flooding, and wildfires. These climate-related physical risks are likely to disrupt local economic activity.
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Kozhukhova, T. V., Yu H. Bocharova, O. V. Ishchenko, and T. A. Fedotova. "EUROPEAN CENTRAL BANK: CLIMATE CHANGE POLICY." Visnyk of Donetsk National University of Economics and Trade named after Mykhailo Tugan-Baranovsky, no. 2 (77) (2022): 137–48. http://dx.doi.org/10.33274/2079-4819-2022-77-2-137-148.
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Objective. The objective of the article is to establish the features of the policy of the European Central Bank in the field of climate change. Methods. In the research process, the following general scientific methods and methods of cognition are applied: methods of scientific abstraction, analysis and synthesis (to study the impact of climate change on the economy and the financial sector), systemic generalization (to systematize risks associated with climate change, determine the measures of central banks regarding minimization of the negative effects of climate change, determination of features of the policy of the European Central Bank in the field of climate change). Results. Based on the results of the conducted research, the impact of climate change on the economy and the financial sector is considered, and climate risks affecting the financial sector are identified (physical risks arising from climate-related hazards that can reduce the value of financial assets and/or increase liabilities), risks of the transition to "green" energy (due to policy changes regarding mitigation and adaptation to climate change, as well as market sentiment and technology changes that may affect the value of financial assets and liabilities), liability risks (due to liability entities for damages related to environmental damage that they may cause); measures to minimize the negative effects of climate change are defined (preliminary determination of climate risks in financial contracts, effective distribution of risks through insurance and reinsurance, assessment of the impact of a natural disaster on inflationary pressure, adjustment of monetary policy if necessary; use of more reliable quantitative assessments based on detailed impact analysis climate risks at the individual sector level; governments announcing a clear and predictable plan for future tightening of carbon policy; central banks incorporating climate variables into their macroeconomic models); the specifics of the European Central Bank's policy in the field of climate change are established (the presence of a strong normative and legal support of the policy in the field of climate change, which covers the monetary policy strategy, the action plan on climate change, the climate agenda with defined strategic priorities and measures; the presence of strategic goals and priorities in the field of climate change, which consist in managing and mitigating financial risks associated with climate change and assessing its economic impact, promoting stable financing to support an orderly transition to a low-carbon economy, sharing the experience of the ECB).
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Wang, Jing, Xinyan Gao, Xingchen Guan, and Ying Chen. "Climate Risk and Its Hedging-Literature Review." Advances in Economics, Management and Political Sciences 92, no. 1 (June 20, 2024): 307–15. http://dx.doi.org/10.54254/2754-1169/92/20231270.
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Entering the 21st century, climate risks such as typhoons, droughts, floods and global warming are becoming more and more significant. This passage will first discuss the types and impacts of climate risks. Since physical and transition part coexist, the second part of this passage will discuss some of the transition effects, from energy, stock markets, to municipal bonds, by analyzing data and examples from other literature. Compared with the same type of research, we find that investors often underestimate for enterprises to the potential impact of climate change, they pay more attention to enterprise's climate risk management practices and the ESG factors related proportion in the investment decision-making. At the same time, this article links green bonds to climate risk, pointing out that investors tend to invest in projects with strong resilience to climate change, which provides a new perspective on the green bond market. In addition, hedging climate uncertainty is receiving increasing attention, with an introduction to the basic concepts of the two risks, hedging strategies and the integration of the management of climate risk into corporate strategies under different mechanisms.
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Nimmala, Rohit. "Applying Machine Learning Techniques to Evaluate Climate-Related Risks in Real Estate Mortgage Valuations." Journal of Artificial Intelligence & Cloud Computing 2, no. 4 (December 31, 2023): 1–4. http://dx.doi.org/10.47363/jaicc/2023(2)282.
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Facing the escalating effects of climate change, the real estate industry faces risks from physical perils and shifting towards a low-carbon economic model. These risks have substantial consequences for the assessment and effectiveness of real estate mortgage portfolios. Conventional approaches to evaluating mortgage risk frequently fail to capture the intricate, non-linear connections between climate variables and loan results. In this paper, we present a new machine-learning framework that aims to quantify climate-related risks in real estate finance. We utilize neural networks and gradient-boosting algorithms to forecast the likelihood of mortgage defaults and the potential loss resulting from defaults in different climate stress scenarios. A robust and forwardlooking risk assessment is developed by integrating property-level exposure data, loan characteristics, and macroeconomic indicators. The empirical findings prove that our models perform superior to conventional econometric methods regarding predictive precision and computational effectiveness. The framework offers a robust instrument for investors, lenders, and regulators who aim to effectively address climate risks and enhance their ability to withstand and adapt to an unpredictable future.
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Gasbarro, Federica, Tiberio Daddi, and Fabio Iraldo. "The Role of Past Experience with a Single Climate Physical Risk in Adaptation Response to Multiple Climate Physical Risks: A Multiple Case Study of Italian Companies." Journal of Management and Sustainability 9, no. 2 (November 29, 2019): 162. http://dx.doi.org/10.5539/jms.v9n2p162.
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With the increasing occurrence and intensity of weather and climate extremes, adaptation to climate change has become an imperative for all the societal actors, including companies. Business adaptation behavior is influenced by specific internal and external conditions. Based on a multiple case study of Italian companies within the project Life IRIS (Improve Resilience of Industry Sector), the paper examines the interaction of multiple physical risk drivers and organizational factors that trigger a change in the adaptation behavior of companies to climate change, from a deferred behavior to a reactive one and, then, to a pre-emptive behavior over time. In particular, the study shows how past experience with a single climate event can trigger a comprehensive strategy to deal with multiple climate events. Implications for management practice and policymakers are discussed at the end of the paper.
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Higgins, Paul A. T., and Jonah V. Steinbuck. "A Conceptual Tool for Climate Change Risk Assessment." Earth Interactions 18, no. 21 (December 1, 2014): 1–15. http://dx.doi.org/10.1175/ei-d-14-0003.1.
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Abstract This study develops a new conceptual tool to explore the potential societal consequences of climate change. The conceptual tool delineates three quasi-independent factors that contribute to the societal consequences of climate change: how climate changes; the sensitivity of physical systems, biological resources, and social institutions to climate change; and the degree of human dependence on those systems, resources, and institutions. This conceptual tool, as currently developed, is not predictive, but it enables the exploration of the dependence of climate change risks on key contributing factors. In exploring a range of plausible behaviors for these factors and methods for their synthesis, the authors show that plausible assumptions lead to a wide range in potential societal consequences of climate change. This illustrates that the societal consequences of climate change are currently difficult to constrain and that high-consequence climate change outcomes are not necessarily low probability, as suggested by leading economic analyses. With careful implementation, this new conceptual tool has potential to increase public understanding of climate change risks, to support risk management decision making, or to facilitate communication of climate risks across disciplinary boundaries.
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Di Febo, Elisa, Eliana Angelini, and Tu Le. "European Non-Performing Exposures (NPEs) and Climate-Related Risks: Country Dimensions." Risks 12, no. 8 (August 13, 2024): 128. http://dx.doi.org/10.3390/risks12080128.
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The EU faces two economic challenges: managing non-performing exposures (NPEs) and climate change. This paper analyzes the relationship between the NPEs of domestic banking groups and climate risks, including macroeconomic variables such as the GDP growth rate, unemployment rate (UnEmp), and the voice and accountability percentile (VCA) and the interaction variable between the GHG and the Rule of Law Percentile (GhGRLP). The estimation uses ordinary least squares with time-fixed and individual effects. Physical and transition risks significantly affect NPEs, showing that both adverse climate events and the transition to a low-carbon economy worsen the financial situation of European banking institutions. The analysis also revealed that increased levels of VCA lead to a rise in NPEs, while an increase in GhGRLP reduces NPEs. In contrast, financial institutions tend to recognize and report NPEs more accurately in contexts with greater transparency and accountability. In comparison, UnEmp negatively affects NPEs, suggesting that economic support measures during high unemployment can reduce NPEs in the subsequent period. In conclusion, climate risk management represents a crucial challenge for the financial stability of banking institutions. Policymakers and financial institutions must continue to develop and implement climate change mitigation and adaptation strategies to preserve financial system stability amid growing climate uncertainties.
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Mikheev, P. N. "On Approaches to Taking into Account the Risks of Changing Climatic Conditions when Planning and Implementing Oil and Gas Projects." Issues of Risk Analysis 18, no. 1 (February 25, 2021): 52–65. http://dx.doi.org/10.32686/1812-5220-2021-18-1-52-65.
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The article discusses issues related to the impact of climate change on the objects of the oil and gas industry. The main trends in climate change on a global and regional (on the territory of Russian Federation) scale are outlined. Possible approaches to the identification and assessment of climate risks are discussed. The role of climatic risks as physical factors at various stages of development and implementation of oil and gas projects is shown. Based on the example of oil and gas facilities in the Tomsk region, a qualitative assessment of the level of potential risk from a weather and climatic perspective is given. Approaches to creating a risk management and adaptation system to climate change are presented.
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de Maximy, Faustine, Vincent Pouderoux, and Théo Le Guenedal. "Modeling Direct and Indirect Climate-Related Physical Risks." SSRN Electronic Journal, 2024. http://dx.doi.org/10.2139/ssrn.4792467.
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Xu, Xin, An Haizhong, Shupei Huang, and Nanfei Jia. "Measurement of Daily Climate Physical Risks and Climate Transition Risks Encountered by China’s Energy Sector Stocks." SSRN Electronic Journal, 2023. http://dx.doi.org/10.2139/ssrn.4623935.
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Xu, Xin, Haizhong An, Shupei Huang, Nanfei Jia, and Yajie Qi. "Measurement of Daily Climate Physical Risks and Climate Transition Risks Encountered by China’s Energy Sector Stocks." International Review of Economics & Finance, May 2024. http://dx.doi.org/10.1016/j.iref.2024.05.006.
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Salisu, Afees A., Ahamuefula E. Ogbonna, and Xuan Vinh Vo. "Climate risks and the REITs market." International Journal of Finance & Economics, April 28, 2024. http://dx.doi.org/10.1002/ijfe.2983.
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AbstractThis study presents results supporting the need to price climate risks in real estate investment trusts. We approach this objective by conducting some empirical analyses for global, regional, and [US] sectoral REITs for want of wider coverage while we also consider variants of climate risks involving physical and transition risks. We first establish that climate concerns amplify the volatility of REIT returns. While our results are split for sectoral REITs, we find that both physical and transition risks magnify the volatility in the regional and global REITs market. However, when we consider the US sectoral REITs, we find contrasting evidence between the two variants of climate risks. While the transition risks seem to raise the REITs market volatility, perhaps owing to improved trading in the market as signalled by some level commitments towards addressing climate change, the physical risks associated with damages due to climate change tend to lower the REITs market volatility due to lower trading. Consequently, we formulate a framework that enables a profit‐maximizing investor to observe climate risks when making investment decisions in the REITs market, and we further show that doing so provides higher economic gains than ignoring it. This outcome has implications for investors looking for the best hedging strategy against climate‐related risks, especially as the world intensifies efforts towards de‐carbonization.
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Ikonomova, Maria, and Kristen MacAskill. "Climate change hazards, physical infrastructure systems and health pathways." Environmental Research: Infrastructure and Sustainability, September 18, 2023. http://dx.doi.org/10.1088/2634-4505/acfabd.
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Abstract Climate-related hazards such as heatwaves, flooding, wildfires, and storms will increase morbidity and mortality unless infrastructure decision-makers—including urban planners, infrastructure asset managers, and utility providers—implement preventive measures to protect public health from these hazards. Existing research and policies have not systematically identified the key risk factors that these decision-makers need to manage to protect public health in a changing climate. This gap leads to unclarity regarding what infrastructure interventions are required to prevent climate-related health risks and what actors have a responsibility to manage these risks. The Climate-Health-Infrastructure- Pathways Model is introduced in this paper to address this gap and provide a conceptual map that captures the role of physical infrastructure systems in the pathways between climate-related hazards and health risks. The model surpasses what can be found in existing climate change research and policy, including the latest IPCC reporting, and is a conceptual qualitative tool that offers a typology of climate and health risks for infrastructure management. Decision-makers can use the model as a starting point to review the coverage of their current climate risk management plans and identify further opportunities to develop preventive infrastructure responses to protect public health in a changing climate.
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Bauri, Somnath, Amitava Mondal, and Ummatul Fatma. "Impact of climate risk on financial performance – evidence from select energy companies from select G-20 countries." International Journal of Energy Sector Management, July 23, 2024. http://dx.doi.org/10.1108/ijesm-11-2023-0018.
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Purpose The recent meeting of G-20 world leaders, held in New Delhi, in 2023, highlighted that the physical effect of climate change has considerable macro-economic costs at the national and global levels and they have also pledged to accelerate the clean, sustainable and inclusive energy transition along a variety of pathways. Climate change could pose various emerging risks to the firm’s operational and financial activities, specifically for those which are belonging to the energy sector. Thus, this study aims to investigate the impact of climate risks on the financial performance of select energy companies from G-20 countries. Design/methodology/approach The study considered 48 energy companies from G-20 countries as the sample for the period of 2017 to 2021. To measure the climate change-related physical risks, the study has considered the ND-GAIN climate vulnerability score and the firm’s financial performance has been measured by return on assets, return on equity, return on capital used and price-to-book ratio. To examine the impact of climate risks on the financial performance of the sample companies, the authors have used pooled ordinary least squares (OLS) and fixed/random effect regression analysis and required data diagnosis tests are also performed. Findings The empirical results suggested that climate risks negatively impacted the financial performance of the sample companies. The market performances of the firms are also being impacted by the physical climate change. The results of panel data regression analysis also confirmed the robustness of the empirical results derived from the pooled OLS analysis suggesting that firms that operated in a less climate-risky country, financially performed better than the firms that operated in a more climate-risky country. Practical implications The paper has significant practical implications like it could be helpful for the policymakers, investors, suppliers, researchers and other stakeholders in developing deeper insights about the impact of climate risks on the energy sectors from an international perspective. This study may also help the policymakers in developing policies for the management of climate risk for the energy sector. Originality/value This study adds insights to the existing literature in the area of climate risks and firm’s financial performance. Moreover, this may be the first study that attempts to evaluate the impact of climate risks on the financial performance of select energy companies from the G-20’s perspective.
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Pagliari, Maria Sole. "LSIs’ Exposures to Climate Change Related Risks: An Approach to Assess Physical Risks." SSRN Electronic Journal, 2021. http://dx.doi.org/10.2139/ssrn.3797137.
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Pinchot, Ariel, Lihuan Zhou, Giulia Christianson, Jack McClamrock, and Ichiro Sato. "Assessing Physical Risks from Climate Change: Do Companies and Financial Organizations Have Sufficient Guidance?" World Resources Institute, 2021. http://dx.doi.org/10.46830/wriwp.19.00125.
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The purpose of this paper is to provide companies and financial organizations with a common understanding of climate-related physical risks according to climate science, to identify gaps in the publicly available guidance to assess those risks, and to propose potential resources that would facilitate better risk assessment and, in turn, risk management. To do so, we analyze climate-related physical risk assessment guidance from leading corporate disclosure initiatives to examine whether existing publicly available guidance aligns with climate science and provides consistent terminology and robust methodologies for risk assessment. The analysis reveals that the guidance do not share a robust understanding and approach to identifying and assessing physical climate risks, which could result in unmanaged risks, reduced resilience, and ultimately financial losses. The findings are relevant for companies, financial organizations, environmental, social, and governance (ESG) ratings agencies, climate data and analytical service providers, disclosure initiatives, and others seeking to assess exposure to physical risks from climate change, as well as climate scientists and policymakers seeking to influence the private sector.
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Wu, Yangyulong. "The impact of climate risks on green technology innovation: an empirical study based on panel data of 269 cities in China." Frontiers in Environmental Science 12 (January 7, 2025). https://doi.org/10.3389/fenvs.2024.1510883.
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Climate risks include two elements: physical risks and transition risks. Exploring the impact of climate risks on green technology innovation contributes to sustainable development. This study uses panel data from 269 cities in China from 2008 to 2022 to explore the impact of climate risks on green technology innovation, and it employs Spatial Dubin Models for spatial effects analysis. The main research conclusions are as follows. First, the two components of climate risks—physical risks and transition risks—significantly hinder green technology innovation. Second, physical risks suppress green technology innovation by reducing market potential, while transition risks do so by decreasing foreign direct investment. Third, over time, green technology innovation shows a spatial clustering pattern of “low-low” and “high-high.” Fourth, physical risks create negative spatial spillover effects, while transition risks generate positive ones. Fifth, the spatial spillover effects of physical risks are mainly seen in the central region, while those of transition risks are primarily observed in the eastern and western regions, indicating significant regional heterogeneity. Finally, transition risks promoted green technology innovation in the period of 2018–2022, which is different from their suppressive effects in other time periods. In general, this study establishes a more comprehensive analytical framework that fills existing research gaps.
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Li, Xia, and Kevin P. Gallagher. "Assessing the climate change exposure of foreign direct investment." Nature Communications 13, no. 1 (March 18, 2022). http://dx.doi.org/10.1038/s41467-022-28975-5.
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AbstractThis study deploys newly available data to examine the exposure of multinational companies’ overseas investments to physical climate risks. Globally, foreign investments are significantly exposed to lower physical climate risks, compared with local firms across countries. Within countries however, the differences of physical climate risks between foreign and local facilities are small. We also examine China, as it is fast becoming one of the largest sources of outward foreign investment across the globe. We find that foreign direct investment from China is significantly more exposed to water stress, floods, hurricanes and typhoon risks across countries, compared with other foreign facilities. Within host countries however, once again the physical climate risks of Chinese overseas facilities are comparable to those of non-Chinese foreign investments.