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This paper conducts a textual analysis of earnings call transcripts to quantify climate risk exposure at the firm level. We construct dictionaries that measure physical and transition climate risks separately and identify firms that proactively respond to climate risks. Our validation analysis shows that our measures capture firm-level variations in respective climate risk exposure. Firms facing high transition risk, especially those that do not proactively respond, have been valued at a discount in recent years as aggregate investor attention to climate-related issues has been increasing. We document differences in how firms respond through investment, green innovation, and employment when facing high climate risk exposure. [ABSTRACT FROM AUTHOR]

Sweden was one of the first countries to introduce a carbon tax back in 1991. We assemble a unique data set tracking CO2 emissions from Swedish manufacturing firms over 26 years to estimate the impact of carbon pricing on firm-level emission intensities. We estimate an emission-to-pricing elasticity of around two, with substantial heterogeneity across subsectors and firms, where higher abatement costs and tighter financial constraints are associated with lower elasticities. A simple calibration suggests that 2015 CO2 emissions from Swedish manufacturing would have been roughly 30% higher without carbon pricing. [ABSTRACT FROM AUTHOR]

This paper examines how physical climate exposure affects firm performance and global supply chains. We document that heat at supplier locations reduces the operating income of suppliers and their customers. Further, customers respond to perceived changes in suppliers' exposure: when suppliers' realized exposure exceeds ex ante expectations, customers are 7% more likely to terminate supplier relationships. Consistent with experience-based learning, this effect increases with signal strength and repetition and decreases with country-level climate adaptation. Subsequent replacement suppliers show a lower expected and realized but similar projected heat exposure. We find similar results for suppliers' exposure to floods. [ABSTRACT FROM AUTHOR]

We examine whether shareholder votes in environmental and social (ES) proposals are informative about firms' ES risks. ES proposals are unique in that they nearly always fail. We examine whether mutual funds' support for these failed proposals contains information about the ES risks that firms face. Higher support in failed ES proposals predicts subsequent ES incidents and the effects of these incidents on shareholder value. Examining the detailed records of fund votes, we find that agency frictions between a group of shareholders contribute to proposal failure. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online [ABSTRACT FROM AUTHOR]

Municipal bond markets began pricing sea-level rise (SLR) exposure risk in 2013, coinciding with upward revisions to worst-case SLR projections and accompanying uncertainty around these projections. The effect is larger for long-maturity bonds and not solely driven by near-term flood risk. We use a structural model of credit risk to quantify the implied economic impact and distinguish between the effects of underlying asset values and of uncertainty. The SLR exposure premium exhibits a trend different from house prices and is unaffected by house price controls. Together, our results highlight the importance of climate uncertainty in driving municipal bond prices. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online [ABSTRACT FROM AUTHOR]

In its 2023 Climate Doctrine, Russia officially committed to carbon neutrality before 2060. However, on the roadmap fork to climate neutrality Russia’s Low Carbon Strategy chose the 2F (Forest First) pathway with the dominance of the natural solutions in the LULUCF sector and with a moderate decline or even growth (industry and agriculture) in other sectors. This paper focuses on a discussion of the roadmap to carbon neutrality. The roadmapping approach relies on a system of interconnected models for setting the scale of low carbon technologies and practices deployment. The paper concludes that excessive reliance on the 2F pathway is unrealistic, and only the Forest Last family of scenarios, which focuses on substantial reduction of GHG emissions across all sectors, is able to bring Russia to carbon neutrality in 2060. The paper also presents indicators to assess emission reductions by major sectors and discusses the need to reinforce the five pillars to support this pathway: technologies; regulations and programmes; incentives and financing; institutes; and human capital. These five pillars are required to effectively address three basic models of decisions-making (satisficing, optimization, and system transformation). [ABSTRACT FROM AUTHOR]

We studied the causal link between forage condition and food security in northern Kenya and southern Ethiopia and probed the mechanisms through which the effects occur. The study utilized weekly panel survey data collected over a period of 94 weeks (March 2021–December 2022) from drought-prone pastoral regions and estimated two-stage least squares instrumental variables regression to assess causal impacts. We found that an increase in the normalized difference vegetation index (NDVI) – our proxy for forage condition – by 10% significantly reduced the likelihood of a household experiencing food insecurity by 12 percentage points. The main mechanisms through which improved forage condition increased food security were livestock productivity enhancement, reduced prices of basic food commodities (cereals, legumes, and vegetables), and utilization of better coping strategies by households. These findings suggest the need for interventions and initiatives aimed at boosting livestock productivity and reducing vulnerability to drought-induced poor forage conditions. Efforts focused on the monitoring of forage conditions and supporting market development for livestock feed are important for addressing the adverse impacts of drought and deteriorating forage conditions in the horn of Africa. Furthermore, the monitoring of drought conditions and shocks using high-frequency data has the potential for providing early warning and informing anticipatory action. [ABSTRACT FROM AUTHOR]

This paper investigates how climate change and poverty affect child health inequality across 63 provinces in Vietnam from 2006 to 2023. By examining deaths and economic losses from storms and floods, we assess climate change’s impact; while, infant mortality rate (IMR) and under-5 mortality rate (U5MR) serve as indicators of child health inequality. Findings reveal that climate change directly worsens child health inequality and exacerbates it indirectly by increasing poverty. Notably, the effects on U5MR are more pronounced than on IMR. Additionally, child vaccinations, healthcare infrastructure, and access to clean water are vital in reducing health disparities and mitigating climate change’s harmful effects on child health. [ABSTRACT FROM AUTHOR]

How does household exposure to a natural disaster affect higher education investments? Using variation in flooding from Hurricane Harvey (2017), we find that college-aged adults from flooded blocks in Houston are 7% less likely than counterparts to have student loans after Harvey, with larger effects in areas with more potential first-generation students. We find a similar relative decline in enrollment at more exposed Texas universities and colleges and a shift toward majors with higher expected earnings. Our results highlight a decrease in the quantity but an increase in the intensity of investments in human capital after the storm. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]

Through a survey and analyses of observational data, we provide systematic evidence that institutional investors value and demand climate risk disclosures. The survey reveals the investors have a strong demand for climate risk disclosures, and many actively engage their portfolio firms for improvements. Empirical analyses of holdings data corroborate this evidence by showing a significantly positive association between climate-conscious institutional ownership and better firm-level climate risk disclosure. We establish further evidence of institutional investors' influence on firms' climate risk disclosures by examining a shock to the climate risk disclosure demand of French institutional investors (French Article 173). Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]

This study identifies obesity as an important channel through which global warming affects human capital. By analyzing plausibly exogenous year-to-year temperature fluctuations in 152 countries from 1975 to 2016, we find that global warming has significantly increased obesity rates in countries located in temperate zones, while only causing a reduction in a small number of tropical countries. The estimates suggest that a 1 ∘ C increase in the annual mean temperature would result in a worldwide increase in obese adults of 79.7 million, or 12.3%. Similar patterns emerge when examining the effects of temperature bins, seasonal mean temperature, temperature variations, and temperature shocks. Furthermore, we identify substantial heterogeneity in the impact across countries with varying income levels, age structures, and education levels. Finally, by comparing the baseline model with a long-difference model, we demonstrate that long-term adaptation may not significantly mitigate the impact of global warming on obesity in temperate zones. [ABSTRACT FROM AUTHOR]

South Korea is considered one of the leading countries in innovation and research and development (R&D), in particular in renewable energy R&D efforts, but it is also one of the more polluting countries. So, understanding the interplay between these variables is of great interest. The main objective of this article is to examine the relationship between carbon dioxide (CO2) emissions, economic growth (GDP), renewable energy consumption (RE), foreign direct investment (FDI), home patents (HP), and foreign patents (FP) in South Korea using data ranging from 1980 to 2018. For this purpose, the autoregressive distributed lag (ARDL) approach and Granger causality tests were employed. Estimates of long-run elasticity point to a positive relationship between GDP and CO2 emissions. FP and RE have a negative influence on CO2 emissions but they have a favorable effect on GDP. FDI and HP have positive impacts on CO2 emissions. Granger causality outcomes demonstrate that CO2 emissions, GDP, RE, and FP have long-term bidirectional causal relationships. In the short-run, there are unidirectional causalities running from FP and FDI to RE and from FDI and HP to GDP. Besides, there is a bidirectional causality between GDP and RE. South Korea should continue to promote renewable energies and facilitate the use of foreign patents, particularly those relating to renewable energies. This will lead to a reduction in its carbon emissions while benefiting its economic growth. [ABSTRACT FROM AUTHOR]

The production and consumption activities are cross-border and therefore, it is important to understand the role of Global Value Chains (GVCs) in fulfilling a country’s specific climate commitments. This study examines the causal relationship between selected GVC indices and CO2 emissions. We use the GVC position index, considered robust in comparison to the frequently used GVC participation index, for determining the impact on emissions. The forward and backward participation indices are considered in the analysis. The paper presents an analysis of 62 developing and developed economies from 1995 to –2018 using the Juodis A., Y. Karavias, and V. Sarafidis [2021. “A Homogeneous Approach to Testing for Granger non-Causality in Heterogeneous Panels.” Empirical Economics 60 (1): 93–112] approach, which is an improvement over the traditional approaches to analysing causality. The results show that the overall position in GVCs positively affects CO2 emissions for developing countries but a causal relationship does not exist for the developed countries. The developed countries attain a higher participation index but a lower position index. On the other hand, developing countries with fewer stringent environmental regulations may opt for an upstream position (more export-oriented) and by design specialize in more pollution-intensive industries. Noteworthy, production-based emissions in developed countries are reduced because of an increase in imports of emission-intensive products from developing countries. [ABSTRACT FROM AUTHOR]

This paper investigates the connection between climate change and energy security in Europe and provides empirical evidence that these issues are the two faces of the same coin. Using a panel of 39 European countries during the period 1980–2020, the empirical analysis presented in this paper indicates that increasing the share of nuclear, renewables, and other nonhydrocarbon energy and improving energy efficiency could lead to a significant reduction in carbon emissions and improve energy security throughout Europe. Accordingly, policies and reforms aimed at shifting away from hydrocarbons and increasing energy efficiency in distribution and consumption are key to mitigating climate change, reducing energy dependence, and minimizing exposure to energy price volatility. [ABSTRACT FROM AUTHOR]

Energy efficiency is crucial for achieving a balance between economic growth and sustainable development. As carbon-neutral targets continue to gain momentum, green investments are becoming increasingly important. Therefore, it is critical to investigate the relationship between green investment and energy efficiency. This paper aims to fill a gap in the macroeconomic literature by using a generalized method of moments (GMM) technique based on panel data from 30 provinces in China from 2006 to 2019. The econometric results indicate that green investment is positively associated with energy efficiency. Additionally, green investment indirectly promotes energy efficiency by fostering technology innovation and research and development (R&D) intensity. The results also suggest that more advanced digital development is linked to improvements in energy efficiency. Furthermore, regions characterized by higher levels of digital economy exhibit a more pronounced contribution of green investment to energy efficiency. Based on these findings, this paper provides valuable insights for Chinese policymakers on green investment and low-carbon development. [ABSTRACT FROM AUTHOR]

We consider an endogenous learning-by-doing process where countries can invest in research that reduces the systematic uncertainty about climate change damages. We analyse a coalition model in which countries decide whether to join a treaty and then choose their level of research and abatement. Countries can cooperate on research and abatement or only on one of these items. We consider the entire range of possible research spillovers. Cooperation on all issues and large research spillovers are generally welfare improving, but lead to smaller coalitions, as they encourage free-riding. However, on balance, in equilibrium, we find that cooperation should not be confined to research and should include abatement, and research findings should freely travel. [ABSTRACT FROM AUTHOR]

This paper examines how rising temperatures impact the agricultural production value of Thai farmers, compares potential adaptation strategies like agricultural diversification, and analyzes future projections based on IPCC AR6 scenarios. We analyze nationally representative socioeconomic survey data from farm households alongside ERA5 weather data, utilizing econometric regression analysis. Our analysis reveals that higher temperatures lead to a reduction in agricultural output value, with the situation expected to worsen as global warming progresses. Furthermore, we find that households with diversified production practices, such as a variety of agricultural activities or multicropping, exhibit a greater capacity to adapt to rising temperatures. These findings substantiate the importance of the country’s policies promoting integrated farming and diversified crop-mix strategies. [ABSTRACT FROM AUTHOR]

Globally, the effects of climate change are becoming more pronounced. Simultaneously, concerns associated with climate change effects have garnered widespread attention. The motive of this study is to know about the prominent antecedents of climate abnormalities in Pakistan, which may lead to economic abnormality and instability. The core objectives of this research are to: identify the abrupt changes in the climate of Pakistan, know about the level of disruption towards economic conditions due to climate change, detect the aggregate consequences of climate change on the economy of Pakistan, and finally take steps to hedge the abnormalities resulting from the abnormal climate changes. The accomplices employed qualitative methods to gather information. Fuzzy set Qualitative comparative analysis (fsQCA) and semi-organized talks to thoroughly separate each plaintiff's extensive knowledge and opinions. For this study, a sample of 30 experienced economic analysts and climate change experts from Pakistan were chosen. The study's findings verified that several important antecedents, including the nature of climate change abnormalities, are identified in the research. This study explored methods to address these abnormalities and was conducted with professional guidance to meet sustainable development goals related to climate change. Scholars and experts are advised to adopt more systematic approaches to mitigate the risks due to the complex and variable combination situations that led to the climate change risks in Pakistan and the surrounding area.

Over the last one decade, most of the empirical studies on climate variability have largely concentrated on assessing the effect of climate variability on agriculture. Little attention has been given to the analysis of what factors determine the decision to adapt to climate variability and what impact does it has on welfare of the adapting households. This paper therefore, assesses the determinants of adaptation to climate variability and how it influences welfare of the farming households in Uganda. To achieve this, the study utilizes six waves of Uganda National Panel survey collected by Uganda Bureau of Statistics spanning over a period of 10 years from 2009 to 2019 and the switching regression model for empirical analysis. The findings indicate that adapting to climate variability is beneficial to adaptors as it safeguards welfare deterioration. On the other hand, presence of climate variability, age of the household head, the value of household assets, location, formal land ownership, having main occupation as agriculture and availability of extension services were identified as key determinants of the decision to adapt to climate variability among farming households in Uganda. These findings thus highlight the importance to have measures to improve adaptation process at the same time enhancing household welfare.

Banks are the main source of external funding for small businesses. Thus, integrating sustainability considerations in small business lending can support global sustainability efforts. In surveying German banks, I show that banks are in the process of implementing sustainable small business lending. They put more emphasis on sustainability risks than on the transformation of the business model among small businesses. Sustainable relationship lending has some relevance in creating sustainability-related soft information, although respective hard information is preferred by banks. Banks and policymakers can use the findings to better apply sustainable small business lending to sustainability and resilience efforts.

Forest degradation by fires is growing in a fast pace in the Brazilian portion of the Amazonian rainforest, damaging the regional environment and economy. Seeking to measure the impact of such process on rainfall, the paper analyses a wide diversity of fine-grained satellite measurements with causal inference techniques. Results show that agricultural fires increase forest fires in 40 % of the usual rise in forest fires due to seasonal warming. Rainfall is reduced in 25 % of the rainfall decay normally caused by seasonal drying. Impacts on agricultural production were detected, but the evidence was not strong. These findings considerably expand the hitherto available evidence, which is not only scarce and biased by confounders, but essentially uni-disciplinary and thus partial in terms of the acknowledged consequences.

In the face of escalating global climate change and mounting environmental challenges, the interplay between green innovation—a pivotal engine of sustainable development—and climate vulnerability is crucial for grasping global climate change adaptation and mitigation strategies. This study delves into the intricate relation between climate vulnerability and green innovation, utilizing panel data from 131 nations from 1995 to 2019. Our empirical analysis reveals that climate vulnerability significantly hinders green innovation. We further dissect the influence of various sub-sectoral dimensions of climate vulnerability, identifying that ecosystems, food, infrastructure, and water are vital contributors to green innovation. At the same time, habitat and health sectors are detrimental to it. Additionally, we examine the influence of economic and globalization heterogeneity, finding that climate vulnerability adversely impacts green innovation in non-OECD and low-to middle-income countries, with less pronounced effects in nations with higher economic sophistication. Notably, climate vulnerability poses a more significant barrier to green innovation in countries with lower globalization. Our research also indicates that corruption control and political stability can ameliorate the adverse consequences of climate vulnerability on green innovation. In contrast, income inequality and increased greenhouse gas emissions intensify these adverse impacts. This paper contributes to the literature by presenting novel cross-country evidence on the factors influencing green innovation, with a focus on the effect of climate vulnerability.

The circular economy paradigm demands immediate and significant adjustments and changes in management and production business processes to maintain adequate to good ecosystem conditions for the use and development of human life. In this context, we analysed the impact of female leadership in the business environment and its relationship with the conservation of planetary health. This empowers women in the transition toward circular business model within the planet's capacity.For a panel data sample of the world's largest companies, we find that active female participation in high business positions leads to significant changes toward a model that protects the natural and endemic wealth of different ecosystems around de world. Additionally, we found that the active presence of women in the decision-making process concerning the protection of the environment, human development, and economic prosperity is strongly associated with the prospective knowledge that female independent directors possess, and to a greater extent, with the knowledge spillover that the presence of female executive directors entails.

This study investigates the link between climate change and economic growth in Nigeria from 1961 to 2022. To provide a robust analysis that facilitates a nuanced examination of this dynamic relationship, this study employs state-of-the-art econometric approaches, including autoregressive distributed lag (ARDL), fully modified least squares (FMOLS), novel quantile autoregressive distributed lag (QARDL), and time-varying causality. The empirical results of this study are as follows: (1) the impact of climate change on economic growth is not felt in the short run. However, climate change negatively influences economic growth in Nigeria in the long run, (2) the elasticity of climate change increases across the conditional quantile economic growth, (3) unidirectional causality from climate change to economic growth across different time dimensions. These empirical outcomes advocate for a proactive and adaptive policy framework, emphasising the need for the Nigerian government to adopt climate-smart policies.