We focus on listed non-financial companies from the largest European economies to explore the impact of rising stakeholders’ attention towards climate risk on firms’ probability to delist. An aggregate analysis shows that, despite growing awareness about the climate problem, enhanced scrutiny over more polluting firms and improved access to information about corporate sustainability over the last two decades, the share of carbon-intensive industries has not significantly declined in the listed sector relative to the whole economy. Also at the micro-level, firms in carbon-intensive sectors have not become more likely to delist, even in periods of enhanced stakeholders’ concern about climate risk, potentially because they experienced a shift towards lower emissions over the same period. We confirm this result by means of a quasi-natural experiment centered around the enhanced disclosure requirements introduced by the EU Non-Financial Reporting Directive of 2014.

Vietnam, a low middle-income economy, grapples with considerable climate impacts, primarily driven by heat waves, sea level rise, and tropical cyclones. Under ongoing global warming, these extreme weather events are projected to further intensify. We use a dynamic general equilibrium model to study economic transition dynamics from 2015 to 2100, accounting for heat-induced labor productivity losses, agricultural land loss from sea level rise, and residential property damage from tropical cyclones. We compare a Paris-compatible strong mitigation scenario where global warming is limited to well below 2 °C above preindustrial levels to a strong emission scenario where warming reaches 4–5 °C. We find that the impacts of climate change on output and investment are highly uncertain, with differences between the two emission scenarios remaining statistically insignificant until the end of the century, despite substantially higher climate forcing in the latter. By contrast, consumption losses are significantly larger under the high emission scenario. These negative impacts are primarily driven by heat-induced labor productivity losses, while TCs are the main source of uncertainty. Our findings highlight the need for analytical frameworks to capture the different channels through which climate and climate change affect economic development, rather than focusing mainly on output-related damage, as done in many existing studies.

We document a global reallocation of pollutive assets as a response to investor pressure: large firms facing increased investor pressure divest foreign-located pollutive assets to firms that are less in the limelight. There is no evidence of increased engagement in any other emission reduction activities. We estimate that 369 million metric tons (mt) of CO2e are reallocated via divestments in the post-Paris Agreement period. Our results indicate that investor pressure to decarbonize reshapes the global conglomerate structure of large firms.

Der Klimawandel wirkt sich zunehmend auf die wirtschaftliche Entwicklung in aller Welt aus. Ärmere Haushalte sind dabei den Auswirkungen des Klimawandels stärker ausgesetzt und verletzlicher, sodass der Klimawandel die Ungleichheit wahrscheinlich noch verstärken wird. Politische Maßnahmen zur Verringerung der Treibhausgasemissionen können eine Verschärfung des Klimawandels verhindern, schaffen aber auch ökonomische Gewinner und Verlierer. In diesem Beitrag werden die kombinierten Auswirkungen des Klimawandels und ausgewählter politischer Maßnahmen zur Verringerung der Treibhausgasemissionen auf die wirtschaftliche Ungleichheit untersucht. Die Bewertung erfolgt anhand von acht Modellen für die integrierte Analyse von Klimawandel und wirtschaftlicher Entwicklung, die von verschiedenen Forscherteams unter Verwendung unterschiedlicher Annahmen und Methoden entwickelt wurden. Die Ergebnisse basieren auf historischen Daten und Zukunftsszenarien für zehn Länder in unterschiedlichen Entwicklungsstadien. Die Umsetzung einer ehrgeizigen Klimapolitik im Einklang mit dem Pariser Abkommen führt demnach zu einer geringeren Ungleichheit in der Zukunft als der Verzicht auf Maßnahmen zur Milderung des Klimawandels, auch wenn die Ungleichheit aufgrund der Kosten für die Reduzierung der Treibhausgasemissionen kurzfristig zunimmt. Die Verwendung der Einnahmen aus der Kohlenstoffbepreisung kann dazu beitragen, die Verteilungseffekte der Klimapolitik zu dämpfen und die Ungleichheit kurzfristig sogar zu verringern. Diese Ergebnisse unterstreichen die Rolle von Ausgleichsmechanismen bei der Gestaltung einer fairen und politisch durchsetzbaren Klimapolitik.

This paper examines the macroeconomic and distributional effects of the European Union’s transition to Net Zero emissions through a gradually increasing carbon tax. I develop a New Keynesian Environmental DSGE model with two household types and distinct energy and non-energy sectors. Five alternative uses of carbon tax revenues are considered: equal transfers to households, targeted transfers to Hand-to-Mouth households, subsidies to green energy firms, and reductions in labor and capital income taxes. In the absence of technological progress, the carbon tax policy induces a persistent increase in energy prices and a reduction in GDP, investment, and consumption. Headline inflation falls below zero in the medium run, reflecting weaker aggregate demand. Distributional outcomes vary significantly depending on the implemented revenue recycling scheme: targeted transfers are the most progressive but entail larger macroeconomic costs, while subsidies and tax cuts mitigate output and investment losses but are less effective in narrowing the consumption gap. A limited foresight scenario, in which agents learn about policy targets sequentially, generates more volatile adjustment paths and temporary inflationary spikes around announcements, but long-run outcomes remain close to the baseline.

Climate policy design must balance emissions mitigation with concerns for fairness, particularly as climate change disproportionately affects the poorest households within and across countries. Integrated Assessment Models used for global climate policy evaluation have so far typically not considered inequality effects within countries. To fill this gap, we develop a global Integrated Assessment Model representing national economies and subnational income, mitigation cost, and climate damage distribution and assess a range of climate policy schemes with varying levels of effort sharing across countries and households. The schemes are consistent with limiting temperature increases to 2 °C and account for the possibility to use carbon tax revenues to address distributional effects within and between countries. We find that carbon taxation with redistribution improves global welfare and reduces inequality, with the most substantial gains achieved under uniform taxation paired with global per capita transfers. A Loss and Damage mechanism offers significant welfare improvements in vulnerable countries while requiring only a modest share of global carbon revenues in the medium term. The poorest households within all countries may benefit from the transfer scheme, in particular when some redistribution is made at the country level. Our findings underscore the potential for climate policy to advance both environmental and social goals, provided revenue recycling mechanisms are effectively implemented. In particular, they demonstrate the feasibility of a welfare improving global climate policy involving limited international redistribution.

Vietnam, a lower-middle-income economy, faces severe climate risks from heat waves, sea-level rise, and tropical cyclones, which are expected to intensify under ongoing global warming. Using a dynamic general equilibrium model, we analyze economic transition dynamics from 2015 to 2100, incorporating heat-induced labor productivity losses, agricultural land loss, and cyclone-related property damage. We compare a Paris-compatible scenario limiting warming to below 2 °C with a high-emission scenario reaching 4–5 °C. While output and investment impacts remain highly uncertain and statistically indistinguishable across scenarios until 2100, consumption losses are significantly larger under high emissions, mainly driven by heat-related productivity declines, with cyclones contributing most to uncertainty. These findings underscore the importance of considering multiple impact channels beyond output damages in climate-development research.