The financial system is a key tool to enable the shift towards a climate - smart economy: by reallocating capital to low- carbon assets, it internalizes the climate externality. However, the financia l sector operates as an ecosystem of evolving agents continuously shaping the outcomes they jointly generate. Hence, the consequences of global warming and the climate impacts are potentially amplified by the micro and meso dynamics of agents interacting with each other and with technologies and institutions in the space they operate. In this working paper, w e present a concise but exhaustive review about complex networks models and methods applied to climate finance. We show where networks can overcome the limitations of standard economic models in both macroprudential regulation and capital allocation. We present the main challenges ahead and we discuss the importance of a renewed research -policy dialogue to advance the discipline.

Beyond standard economic approaches: complex networks in climate finance

Larosa Francesca
;
Ameli Nadia;
2021

Abstract

The financial system is a key tool to enable the shift towards a climate - smart economy: by reallocating capital to low- carbon assets, it internalizes the climate externality. However, the financia l sector operates as an ecosystem of evolving agents continuously shaping the outcomes they jointly generate. Hence, the consequences of global warming and the climate impacts are potentially amplified by the micro and meso dynamics of agents interacting with each other and with technologies and institutions in the space they operate. In this working paper, w e present a concise but exhaustive review about complex networks models and methods applied to climate finance. We show where networks can overcome the limitations of standard economic models in both macroprudential regulation and capital allocation. We present the main challenges ahead and we discuss the importance of a renewed research -policy dialogue to advance the discipline.
File in questo prodotto:
File Dimensione Formato  
WP_DSE_larosa_ameli_rickman_kothari_19_21.pdf

accesso aperto

Tipologia: Versione dell'editore
Licenza: Accesso libero (no vincoli)
Dimensione 479.35 kB
Formato Adobe PDF
479.35 kB Adobe PDF Visualizza/Apri

I documenti in ARCA sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/10278/3743696
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus ND
  • ???jsp.display-item.citation.isi??? ND
social impact