The ECB recently updated its data on the impact of climate change on the financial system. How green are green bonds and banks’ loan portfolios? How strongly could they be affected by natural hazards? Andrew Kanutin discusses these and other new insights from the data. 

The original post was published on 18 April 2024.
https://www.ecb.europa.eu/press/blog/date/2024/html/ecb.blog20240418~2240ea1850.en.html

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Improved data: how climate change impacts banks

In this week’s episode, host Daniel Raimi talks with Stefano De Clara, head of secretariat at the International Carbon Action Partnership, about the continued development of emissions trading systems around the world in 2024. Emissions trading systems (ETSs) are market-based policies that set a cap on total greenhouse gas emissions or on a ratio of emissions to output (e.g., of generated electricity or manufactured steel). A limited number of emissions permits are auctioned or distributed in carbon markets, and emitters can then trade these permits within the market. De Clara discusses global trends in the development of carbon markets and trading systems, including innovative policy designs, and highlights emissions trading systems in the European Union, China, Latin America, Indonesia, and Canada.

References and recommendations:

“Emissions Trading Worldwide: 2024 ICAP Status Report” from the International Carbon Action Partnership; https://icapcarbonaction.com/en/publications/emissions-trading-worldwide-2024-icap-status-report

“Silent Spring” by Rachel Carson; https://www.rachelcarson.org/silent-spring

Unpacking the Growth in Global Carbon Markets, with Stefano De Clara

"Investigadores desarrollan el primer presupuesto integral de gases de efecto invernadero de México"
de Rachel Fritts

Traducción de Anthony Ramírez-Salazar
Grabación de audio de Bernardo Bastien

Investigadores desarrollan el primer presupuesto integral de gases de efecto invernadero de México

Carbon credits help individuals, companies, countries, and organizations, including investors and financial players like Shahryar Oveissi, balance out their carbon emissions. They use these credits to trade in the carbon market, aiming to profit from price fluctuations. Alongside reducing CO2 emissions, financial players enhance market activity and efficiency, thereby reducing trading costs.

How do Carbon Credits Help Mitigate Carbon Emissions Know with Shahryar Oveissi

We did this. There's no excuse that our grandchildren will understand.

#tribalcore

Black Lung

Black Lung (SmaBoi Climate Disruption Rap)

In this week’s episode, host Daniel Raimi talks with Andrew Waxman, an assistant professor at the University of Texas at Austin, about carbon capture, utilization, and storage (CCUS), a technology that involves the capture and storage or reuse of carbon dioxide. Waxman discusses the application of CCUS technology for reducing greenhouse gas emissions from power plants and industrial facilities; the  importance of the technology for achieving emissions-reduction goals; and the potential effects of the technology on local air pollution, particularly in communities along the US Gulf Coast.

References and recommendations:

“What are the likely air pollution impacts of carbon capture and storage?” by Andrew Waxman, HR Huber-Rodriquez, and Sheila M. Olmstead; https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4590320

“Special Report on Carbon Capture Utilisation and Storage: CCUS in Clean Energy Transitions” from the International Energy Agency; https://www.iea.org/reports/ccus-in-clean-energy-transitions

“City Limits: Infrastructure, Inequality, and the Future of America’s Highways” by Megan Kimble; https://www.penguinrandomhouse.com/books/711708/city-limits-by-megan-kimble/

Will Carbon Capture Make Local Air Pollution Worse?, with Andrew Waxman

In conversation with Willie Walsh, Director General of the International Air Transport Association (IATA), he explores the most pressing issues facing the aviation industry today. The conversation looks at the industry’s ambitious commitment to achieving net zero carbon emissions by 2050, with a focus on the challenges and opportunities that stakeholders face. Mr Walsh also discusses topics such as increased pressure on airport capacity, regulatory challenges that aviation companies face, as well as the broader aviation supply chain and current EU and international aviation policies. This conversation aims to provide a comprehensive look at the future of aviation, with insights into how international and European institutions interact to ensure the aviation industry can operate safely and efficiently.

About the Speaker:

Willie Walsh became the eighth person to lead the International Air Transport Association (IATA) when he took on the role of Director General in April 2021. Mr Walsh began as a cadet pilot with Aer Lingus in 1979 and rose to the position of Chief Executive at the airline in 2001. In 2005, he was appointed Chief Executive of British Airways (BA), leading them through the 2008/09 global financial crisis, he also established a transatlantic joint business venture with Iberia, Finnair, and American Airlines, and oversaw the 2011 merger of BA and Iberia under a newly established parent company, International Airlines Group (IAG). He was the Chief Executive of IAG from its inception until September 2020. Mr Walsh served on the IATA Board of Governors between 2005 to 2018, including serving as Chair from 2016 to 2017.

In Conversation with Willie Walsh

In this week’s episode, host Daniel Raimi talks with Nafisa Lohawala, a fellow at Resources for the Future, about sustainable aviation fuels (SAFs). Lohawala discusses the climate impact of the aviation industry, different types of SAFs, and the reductions in greenhouse gas emissions that SAFs can help achieve. Lohawala also discusses policies that support the adoption of SAFs, including international agreements and financial incentives in the United States.

References and recommendations:

“Alternative Fuels for Reducing the Contribution of Aviation to Climate Change” by Nafisa Lohawala, Michael A. Toman, and Emily Joiner; https://www.rff.org/publications/working-papers/alternative-fuels-for-reducing-the-contribution-of-aviation-to-climate-change/

“Promoting Sustainable Aviation Fuels: Considerations for Policymakers” by Nafisa Lohawala; https://www.resources.org/common-resources/promoting-sustainable-aviation-fuels-considerations-for-policymakers

“Supporting Policies for Sustainable Aviation Fuels: Key Areas for Further Research” by Nafisa Lohawla and Michael A. Toman; https://www.resources.org/common-resources/supporting-policies-for-sustainable-aviation-fuels-key-areas-for-further-research

“Mistakes Were Made (but Not by Me)” by Carol Tavris and Elliot Aronson; https://www.harpercollins.com/products/mistakes-were-made-but-not-by-me-third-edition-carol-tavriselliot-aronson?variant=40825034276898

“How to Know a Person” by David Brooks; https://www.penguinrandomhouse.com/books/652822/how-to-know-a-person-by-david-brooks/

What Are Sustainable Aviation Fuels?, with Nafisa Lohawala

This paper examines whether major corporate customers curb corporate carbon emissions along the supply chain. We show that suppliers with a more concentrated customer base have significantly lower carbon emissions. The results are robust to alternative measures of carbon emissions and customer concentration, alternative sample, alternative explanation, and various approaches to mitigate endogeneity concerns. The effect is more pronounced when major customers have made emission-reduction commitment, when they are exposed to greater climate regulatory shocks and risks, and when they become more concerned about regulatory scrutiny. Moreover, the curbing effect of major customers on supplier carbon emissions is stronger when customers have lower switching costs and stronger bargaining power over suppliers. We show that one way through which suppliers reduce emissions is by adopting green technologies. Our study highlights the role of major customers in facilitating the transition to a low-carbon economy through decarbonization along the supply chain. Authors: Deng, Saiying, Tinghua Duan, Frank Weikai Li, and Xiaoling Pu.

#16 Breakdown: Major customers and carbon footprints along the supply chain

In this week’s episode, host Kristin Hayes talks with Danny Richter, director of the Pricing Carbon Initiative, about the existing suite of carbon pricing policies, a set of climate policy tools designed to reduce carbon dioxide emissions by requiring companies and other entities to pay for each ton of carbon dioxide they release into the atmosphere. Richter evaluates the international and domestic approaches to carbon pricing policies, explaining their history, uptake, and longevity. Richter highlights the flexibility of carbon pricing programs—which allows policymakers to tailor the sources and investment of revenues from carbon pricing to their unique policy priorities—as key to the long-term success of these programs. Richter then outlines shifting attitudes toward carbon pricing in the United States, highlighting how successful cap-and-invest initiatives emphasize the economic advantages of these policies while delivering climate benefits.

References and recommendations:

Pricing Carbon Initiative; https://pricingcarbon.org/

“Fourth Generation Carbon Prices” by Danny Richter; https://pricingcarbon.org/2024/11/fourth-generation-carbon-prices/

“Reserved: Carbon Pricing and the Dollar’s Special Status” by Danny Richter; https://pricingcarbon.org/2025/04/reserved-carbon-pricing-and-the-dollars-special-status/

Carbon Pricing Dashboard from the World Bank; https://carbonpricingdashboard.worldbank.org/

“How Carbon Border Adjustments Might Drive Global Climate Policy Momentum” by Kimberly Clausing, Milan Elkerbout, Katarina Nehrkorn, and Catherine Wolfram; https://www.rff.org/publications/reports/how-carbon-border-adjustments-might-drive-global-climate-policy-momentum/

“Our Dollar, Your Problem” by Kenneth Rogoff; https://yalebooks.yale.edu/book/9780300275315/our-dollar-your-problem/

Carbon Pricing Is Dead. Long Live Carbon Pricing!, with Danny Richter

Developer of interactive online media, hobbyist skydiver, professional voice actor, musician and business owner. Producer of musical scores & independent video games. Past exploits and destinations include the Eiffel Tower, Stonehenge, Chichen Itza, X'Caret, Cozumel, Old Faithful, coast-to-coast in the US and Australia, Shakespeare's home, Canada, PAX East, Burning Man, Alcatraz, and Shakespeare's Globe Theater, among others. Co-presented on stage with Kevin Mitnick and Steve Wozniak. Met and chilled with quite a few celebrities and luminaries, including Michael Dell, Dr. Vinton Cerf, MC Frontalot, mc chris, MC Lars, Tahmoh Penikett, Alona Tal, Richard Speight, Misha Collins and Jared Padalecki. Hobbies include skydiving, bungee jumping and free climbing. Once waterskied on the noses of dolphins.

The ECB Blog offers new insights on the economy and central bank policies based on our data, analysis and research - for the euro area and beyond. For the full texts of our posts, including visuals, please visit our website.

Posts are authored by ECB staff and the audio versions are machine generated. The views expressed are those of the posts' authors and not necessarily those of the European Central Bank and the Eurosystem.

Shahryar Oveissi is a serial entrepreneur with a global network, focusing on carbon offset development through Argali Carbon Corporation and Argali Climate Fund. He has extensive experience in private equity, biotech, and cannabis investments, with a strong background in sustainability and humanitarian initiatives

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New tracks tagged #carbon emissions