Climate finance
Climate change has profoundly shaped the modern view of finance. The Climate Finance research can be typically broken down into two categories; direct and indirect.
The direct climate change effects, which are related to changes in weather patterns (e.g., heavy-storms, more frequent heatwaves, and increasing global temperature), can deplete labour productivity and reduce food production and thus increase the overall climate change risk. In turn, heightened climate change risk can alter the perception of investors about the financial markets. Investors are concerned about an imminent increase in energy demand because firms would spend more in order to maintain standard working conditions. Moreover, weather shocks act as a systematic negative productivity shock, which will eventually affect the stock valuations. Finally, evidence from psychological literature shows that changes in weather patterns affect investors’ mood.
The indirect impact of climate change can be observed in the financial markets in the form of Climate Policy. Policy-makers make an effort to stabilise rising global temperatures by regulating the carbon emissions of firms. For example, European emission trading scheme is a market for reducing firms’ emissions. Emissions have been financialised as commodities and are exchanged in a cap and trade system. Cap and trade system indicates that the quantity of emissions has to be capped, otherwise the polluters will be penalised. Therefore, firms place particular emphasis on reducing their carbon footprint. For this reason, there is an increasing volume of funds allocated to greens investments (e.g clean-tech). Firms benefit from this type of investments in three ways; first, they comply with the regulatory limits, second social investors would reward environmental sensitive firms and third firms establish long-term objectives, which can potentially lead them to gain and sustain a competitive advantage.
- Climate forecasting
- Pricing energy and environmental products
- Environmental strategy and policy
Publications
- 2022
Meng, X. and Taylor, J. W. Comparing probabilistic forecasts of the daily minimum and maximum temperature. International Journal of Forecasting. 38 (2022): 267-281.
Papavasileiou, E., Tzouvanas, P., and Kizys, R. (2022). Endosymbiosis in the boardroom and ESG performance: A generational perspective. Academy of Management Proceedings 2022(1), 18272.
Tzouvanas, Panagiotis (2022) Climate-finance. In: Floros, Christos and Chatziantoniou, Ioannis (eds.) Applications in energy finance: the energy sector, economic activity, financial markets and the environment. Palgrave Macmillan, pp. 195-215. ISBN 9783030929565
- 2021
Baamonde-Seoane, M. A., del Carmen Calvo-Garrido, M., Coulon, M., and Vázquez, C. Numerical solution of a nonlinear PDE model for pricing renewable energy Certificates (RECs). Applied Mathematics and Computation, 404 (2021): 126199.
Filippidis, M., Tzouvanas, P., and Chatziantoniou, I. Energy poverty through the lens of the energy-environmental Kuznets curve hypothesis. Energy Economics. 100 (2021): 105328.
Kizys, R., Tzouvanas, P. and Donadelli, M. From COVID-19 herd immunity to investor herding in international stock markets: The role of government and regulatory restrictions. International Review of Financial Analysis 74 (2021): 101663.
Papavasileiou, E. F., and Tzouvanas, P. Tourism carbon Kuznets-curve hypothesis: a systematic literature review and a paradigm shift to a corporation-performance perspective. Journal of Travel Research 60.4 (2021): 896-911.
Tzouvanas, P., & Mamatzakis, E. C. Does it pay to invest in environmental stocks? International Review of Financial Analysis, 77 (2021): 101812.
Zaremba, A., Kizys, R., Tzouvanas, P., Aharon, D. Y., and Demir, E. (2021). The quest for multidimensional financial immunity to the COVID-19 pandemic: Evidence from international stock markets. Journal of International Financial Markets, Institutions and Money, 71, 101284.
- 2020
Tzouvanas, P., Kizys, R., Chatziantoniou, I. and Sagitova, R. Environmental disclosure and idiosyncratic risk in the European manufacturing sector. Energy Economics (2020): 104715.
Tzouvanas, P., Kizys, R., Chatziantoniou, I., and Sagitova, R. Environmental and financial performance in the European manufacturing sector: An analysis of extreme tail dependency. The British Accounting Review, 52.6 (2020): 100863.
- 2019
Letta, M. and Tol, R. Weather, climate and total factor productivity. Environmental and Resource Economics, 73.1 (2019): 283-305.
Tol, R. A social cost of carbon for (almost) every country. Energy Economics, (2019) ISSN 0140-9883
- 2018
Busch, J., Foxon, T.J. and Taylor, P.G Designing industrial strategy for a low carbon transformation. Environmental Innovation and Societal Transitions, 29 (2018): 14-125.
Hardt, L., Owen, A., Brockway, P., Heun, M.K, Barrett, J., Taylor, P.G and Foxon, T.J. Untangling the drivers of energy reduction in the UK productive sectors: efficiency or offshoring? Applied Energy, 223 (2018): 124-133.
Morgan, E., Foxon, T.J. and Tallontire, A. ‘I prefer 30°’?: Business strategies for influencing consumer laundry practices to reduce carbon emissions. Journal of Cleaner Production, 190 (2018): 234-250.
Barton, J., Davies, L., Dooley, B., Foxon, T.J., Galloway, S., Hammond, G.P., O’Grady, Á., Robertson, E and Thomson, M. Transition pathways for a UK low-carbon electricity system: comparing scenarios and technology implications. Renewable and Sustainable Energy Reviews, 82 (2018): 2779-2790.
Tol, R. Economic impacts of climate change. Review of Environmental Economics and Policy (2018).
Hiteva, R., Foxon, T.J and Lovell, K. The political economy of low carbon infrastructure in the UK.In: Handbook of international political economy of energy and natural resources. (2018) Edward Elgar Publishing. (Accepted)
Bergman, N. and Foxon, T.J. Reorienting finance towards energy efficiency: the case of UK housing. Working Paper (2018), SPRU Working Paper Series, University of Sussex.
Van der Linden, M., Reis, E., Bacci, M.L., Castles, S., Delgado-Wise, R., Kabeer, N., Kannan, K.P., Munck, R., Roberts, A., Schot, J., Therborn, G., Wagner, P., Foxon, T.J. and Kanger, L. (2018) Social trends and new geographies. In: IPSP, International Panel on Social Progress (ed.) Rethinking society for the 21st century. Report Of The International Panel On Social Progress, 1 . Cambridge University Press, Cambridge, pp. 9-40. ISBN 9781108436328