COP22 Side Event: Disentangling the Climate-Finance Nexus

Irene Monasterolo, a post-doctoral associate at the Frederick S. Pardee Center for the Study of the Longer-Range Future, will be co-hosting and participating in a side event at the UN climate change conference in Marrakech. The event, titled “Disentangling the Climate-Finance Nexus: Methods for 2°C alignment and climate stress-tests for institutional investors and development banks,” will take place on Thursday, November 10 from 9:00-10:30 am.

Scholars and practitioners increasingly recognize the need to estimate the impact of energy transition risks on the financial system. However, traditional risk analysis inadequately deals with the intrinsic uncertainty of models’ estimates of the effects of climate policies on carbon stranded assets, and calculations of expected losses or gains can be inaccurate. The findings of recent research supports the idea that the timing and governance process in the implementation of climate policies matters. In a scenario in which policies are implemented early on, and within a stable policy framework, climate policies could result in potential net winners and losers across investors in the energy sector, but would not have adverse systemic impacts.

This event will provide first-hand knowledge on (1) recent innovative approaches to assess exposures to climate-relevant sectors (fossil fuels, utility, transport, housing and energy intensive sectors) and portfolios’ alignment with climate targets; (2) successful applications to empirical case-studies of interest to practitioners, regulators, and multilateral development banks and institutions; and (3) lessons learned from the case studies, in order to mainstream among institutional investors and development banks the analysis of climate-policy risk exposures and portfolios’ alignment with the 2 degrees C target.

Thursday, November 10, 2016
9:00-10:30 am

COP22 Green Zone, Room Souss

● Stefano Battiston (University of Zurich), Climate stress-test of the EU financial system
● Thomas Braschi (2 degrees investing initiative), SEI Metrics methodology for 2deg portfolio compliance
● Irene Monasterolo (Boston University), Financing the energy transition: green bonds, carbon tax and fossil fuels subsidies’ trade-off
● Luigi Carafa (Barcelona Centre for International Affairs), Climate finance in developing and emerging economies: the role of policy de-risking.