Suchergebnisse

We live at a unique moment in history when rapid economic growth has finally lifted hundreds of millions out of deep poverty, not only in Asia and Latin America but increasingly in Africa (Sala-i-Martin and Pinkovskiy, 2010). Yet the impending damage of climate change could reverse this. The world is failing miserably at implementing rational and collectively beneficial treaties and policies to tackle climate change. In spite of the many declarations concerning the need not to exceed two degrees of warming, current lack of action will make it difficult to avoid three degrees. The effects of climate change will be very unequal, particularly because there is a negative relationship between temperature and income (Dellet al., 2009). The poor will have particular difficulty in making the necessary investments to protect themselves and to adapt in response to climate change pressures, rendering them most vulnerable. New evidence shows that even the vital ability to grow economically will be severely set back. Several articles have shown how heat – particularly in poor countries – may increase conflicts and decrease growth rates. Climate change is far from the only global environmental problem we face; we find in one area after another that world production and consumption exceeds the Earth's capacity to provide a satisfying quality of life, which raises a number of sustainability issues (see, for instance, Arrowet al., 2012).

AbstractShould the economic recovery from the 2019 novel coronavirus disease (COVID-19) be green? The current crisis is so severe that we should not take the answer for granted. It requires serious thought and we start by reviewing some arguments for and against a green approach. A crucial element is of course to see how different industries fare in the current crisis. Our empirical contribution is to examine daily stock returns for firms from the STOXX Europe 600 index. We find that firms with higher carbon intensities experienced significantly large decreases in stock values particularly those within the crude petroleum extraction, air transport and coke and refined petroleum industries. Our tentative conclusion is that efforts to revitalize the economy should avoid subsidizing stranded assets and instead target the industries of the future. However, identifying these will not necessarily be easy. We find, for example, that having an official ESG "climate change policy" has no effect on firm performance during the pandemic. We suggest possible ways of designing a new form of more informative index.