The research group “Climate Economics and Finance” develops both theoretical and applied research on the interplay between climate change, biodiversity, the real economy and the financial system. We deploy a range of approaches that include empirical analyses, macroeconomic models (e.g. Stock-Flow Consistent models, Input-Output, Agent Based Models), climate financial valuation models, financial network models, climate stress tests, and big data.

On the one hand, the research area studies how climate risk scenarios, including physical and transition risk, affect countries’ economic performance and financial stability, considering risk transmission channels, amplifications effects and macro-financial feedbacks. On the other hand, the research area analyses how finance, intended as markets, policies and investors, affect climate mitigation and adaptation outcomes. Finally, we study the conditions for trade-offs to emerge between contrasting policy goals, and the implications on inequality and financial stability.

Our research is interdisciplinary and published in top-tier journals including Science and Nature Climate Change, as well as in field journals. We also contribute to the climate finance and policy debate by discussing research results in national and international newspapers, social media, academic and non-academic events and fora (e.g. the UN Conference of Parties, SUERF, Institute Louis Bachelier, CEPR European Finance Architecture Research Policy Network, central banks’ research seminars and conferences, etc).

Our research aims to make an impact in society by informing decision making in climate economic and finance. We develop research which is policy-relevant, and applied in collaboration with key decision makers including central banks, financial regulators, development finance institutions, private finance and policy makers.

Researchers

Karl Naumann-Woleske

Carmine Russo

Projects

• ESG UPTAKE: ESG risk management framework for the financial sector