Climate Finance: Difference between revisions
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There are two main approaches to climate finance: '''climate investment,''' which involves investing money in companies with low carbon footprint or those that actively address the climate crisis, both for reasons of societal benefit and because these are widely expected to be good investments in the long term, and '''climate analytics,''' which aims to quantify the expected financial impacts of climate change, thereby incentivizing investors and companies to act. ML can help on both of these fronts, on the one hand by in designing portfolios and in timing investments for positive reinforcement of climate-positive investment, and on the other, by helping forecast prices in carbon markets, identifying climate risks and investment opportunities, and quantifying the monetary impact of climate change on supply and demand by using data-based approaches. |
There are two main approaches to climate finance: '''climate investment,''' which involves investing money in companies with low carbon footprint or those that actively address the climate crisis, both for reasons of societal benefit and because these are widely expected to be good investments in the long term, and '''climate analytics,''' which aims to quantify the expected financial impacts of climate change, thereby incentivizing investors and companies to act. ML can help on both of these fronts, on the one hand by in designing portfolios and in timing investments for positive reinforcement of climate-positive investment, and on the other, by helping forecast prices in carbon markets, identifying climate risks and investment opportunities, and quantifying the monetary impact of climate change on supply and demand by using data-based approaches. |
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| ⚫ | * [https://unfccc.int/climatefinance/gef/gef_data United Nations Framework Convention on Climate Change (UNFCCC) Climate Finance Data |
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| ⚫ | * [https://publications.iadb.org/en/idbg-climate-finance-2017-dataset Inter-American Development Bank Climate Finance 2017 Dataset]: the IDB publishes its reported climate finance on a project-level, disaggregated basis for all public sector activity, and on an aggregated basis for all private sector activity. |
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*'''Finance and climate: The transition to a low-carbon and climate-resilient economy from a financial sector perspective (2016)'''<ref>{{Cite journal|title=[No title found]|journal=OECD Journal: Financial Market Trends|language=en|doi=10.1787/19952872}}</ref>''':''' This paper sketches out its relevance of climate change for the financial sector, covering topics from low-carbon investments to bridging the manageable financing gap. [https://www.oecd-ilibrary.org/finance-and-investment/finance-and-climate_fmt-2015-5jrrz76d5td5?crawler=true Available here.] |
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== Methods and Software == |
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*'''A climate stress-test of the financial system. (2017)'''<ref>{{Cite journal|last=Battiston|first=Stefano|last2=Mandel|first2=Antoine|last3=Monasterolo|first3=Irene|last4=Schütze|first4=Franziska|last5=Visentin|first5=Gabriele|date=2017-04|title=A climate stress-test of the financial system|url=http://www.nature.com/articles/nclimate3255|journal=Nature Climate Change|language=en|volume=7|issue=4|pages=283–288|doi=10.1038/nclimate3255|issn=1758-678X}}</ref>''':''' a birds-eye view of the potential impacts of climate change on the stock market that looks at how climate policy risk might propagate through the financial system. [https://www.nature.com/articles/nclimate3255 Available here.] |
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*'''Climate change challenges for central banks and financial regulators (2018)''' <ref>{{Cite journal|last=Campiglio|first=Emanuele|last2=Dafermos|first2=Yannis|last3=Monnin|first3=Pierre|last4=Ryan-Collins|first4=Josh|last5=Schotten|first5=Guido|last6=Tanaka|first6=Misa|date=2018-06|title=Climate change challenges for central banks and financial regulators|url=http://www.nature.com/articles/s41558-018-0175-0|journal=Nature Climate Change|language=en|volume=8|issue=6|pages=462–468|doi=10.1038/s41558-018-0175-0|issn=1758-678X}}</ref>: this article presents the key controversies and discusses potential research and policy avenues for the future. |
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| ⚫ | *'''[https://olc.worldbank.org/content/climate-finance-innovative-approaches-supporting-climate-action Climate Finance: Innovative Approaches in Supporting Climate Action]:''' this online course, created by the World Bank Group, summarizes the tested knowledge and practices in climate finance from different development partners. |
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== Libraries and tools == |
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* Boissinot, J., et al., [https://www.oecd-ilibrary.org/finance-and-investment/finance-and-climate_fmt-2015-5jrrz76d5td5?crawler=true Finance and climate: The transition to a low-carbon and climate-resilient economy from a financial sector perspective.] (2016) |
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* Battiston, B., et al., [https://www.nature.com/articles/nclimate3255 A climate stress-test of the financial system.] (2017) |
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* Campiglio, E. [http://eprints.lse.ac.uk/88364/1/Campiglio_Climate%20change_2018.pdf Climate change challenges for central banks and financial regulators] (2018) |
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== Community == |
== Community == |
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=== Major societies and organizations === |
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*[https://www.fsb-tcfd.org/ '''Task Force on Climate-related Financial Disclosures''']: an organization created to increase transparency with regards to climate change reporting, making markets more efficient, and economies more stable and resilient. |
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=== Societies and organizations === |
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*[https://www.oecd.org/cgfi/ '''OECD Center on Green Finance and Investment''']: the mission of the Center is to "help catalyse and support the transition to a green, low-emissions and climate-resilient economy through the development of effective policies, institutions and instruments for green finance and investment". |
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* [https://www.fsb-tcfd.org/ Task Force on Climate-related Financial Disclosures] |
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* [https://www.oecd.org/cgfi/ OECD Center on Green Finance and Investment] |
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=== Past and upcoming events === |
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| ⚫ | * [https://unfccc.int/climatefinance/gef/gef_data '''United Nations Framework Convention on Climate Change (UNFCCC) Climate Finance Data Porta'''l]: this website aims to assemble data on the implementation of adaptation and mitigation projects and other activities under the [https://unfccc.int/process-and-meetings/the-convention/what-is-the-united-nations-framework-convention-on-climate-change United Nations Framework Convention on Climate Change.] |
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== Important considerations == |
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| ⚫ | * [https://publications.iadb.org/en/idbg-climate-finance-2017-dataset '''Inter-American Development Bank Climate Finance 2017 Dataset''']: the IDB publishes its reported climate finance on a project-level, disaggregated basis for all public sector activity, and on an aggregated basis for all private sector activity. |
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== Selected problems == |
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''Under construction'' |
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== References == |
== References == |
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<references /> |
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Revision as of 17:30, 28 August 2020
There are two main approaches to climate finance: climate investment, which involves investing money in companies with low carbon footprint or those that actively address the climate crisis, both for reasons of societal benefit and because these are widely expected to be good investments in the long term, and climate analytics, which aims to quantify the expected financial impacts of climate change, thereby incentivizing investors and companies to act. ML can help on both of these fronts, on the one hand by in designing portfolios and in timing investments for positive reinforcement of climate-positive investment, and on the other, by helping forecast prices in carbon markets, identifying climate risks and investment opportunities, and quantifying the monetary impact of climate change on supply and demand by using data-based approaches.
Background Readings
- Finance and climate: The transition to a low-carbon and climate-resilient economy from a financial sector perspective (2016)[1]: This paper sketches out its relevance of climate change for the financial sector, covering topics from low-carbon investments to bridging the manageable financing gap. Available here.
- A climate stress-test of the financial system. (2017)[2]: a birds-eye view of the potential impacts of climate change on the stock market that looks at how climate policy risk might propagate through the financial system. Available here.
- Climate change challenges for central banks and financial regulators (2018) [3]: this article presents the key controversies and discusses potential research and policy avenues for the future.
Online courses and course materials
- Climate Finance: Innovative Approaches in Supporting Climate Action: this online course, created by the World Bank Group, summarizes the tested knowledge and practices in climate finance from different development partners.
- Climate Change: Financial Risks and Opportunities: this course, curated by the Imperial College London, does a deep dive on the risks and opportunities that climate change presents to financial markets,
- Introduction to Sustainable Finance: a high-level interactive and practice-oriented course that covers the basics of Sustainable Finance, hosted on the UN Climate Change E-Learn platform.
Libraries and tools
- ClimateScope: a country-by-country assessment that provides an interactive report and index indicating suitability for climate-related investment.
- Renewable Energy (RE) Data Explorer: a platform created to inform vital renewable energy investment and deployment decisions.
Community
Major societies and organizations
- Task Force on Climate-related Financial Disclosures: an organization created to increase transparency with regards to climate change reporting, making markets more efficient, and economies more stable and resilient.
- Climate Policy Initiative: an analysis and advisory organization with deep expertise in finance and policy.
- OECD Center on Green Finance and Investment: the mission of the Center is to "help catalyse and support the transition to a green, low-emissions and climate-resilient economy through the development of effective policies, institutions and instruments for green finance and investment".
Data
Datasets are fairly limited in terms of data quantity (i.e. no single dataset would be enough to implement an ML system), but merging different sources of data together can yield interesting insights. Some promising data sources include:
- United Nations Framework Convention on Climate Change (UNFCCC) Climate Finance Data Portal: this website aims to assemble data on the implementation of adaptation and mitigation projects and other activities under the United Nations Framework Convention on Climate Change.
- OECD Development finance data: includes high level overviews on developmental statistics, as well as country and sector specific data. Y
- Global Financial Development Database: an extensive dataset of financial system characteristics for 214 economies.
- Inter-American Development Bank Climate Finance 2017 Dataset: the IDB publishes its reported climate finance on a project-level, disaggregated basis for all public sector activity, and on an aggregated basis for all private sector activity.
- Electronic Data Gathering, Analysis and Retrieval (EDGAR): the electronic filing system created by the Securities and Exchange Commission for corporate filings, which can be queried by company, by year and by sector in PDF format.
Selected problems
Under construction
References
- ↑ "[No title found]". OECD Journal: Financial Market Trends. doi:10.1787/19952872.
- ↑ Battiston, Stefano; Mandel, Antoine; Monasterolo, Irene; Schütze, Franziska; Visentin, Gabriele (2017-04). "A climate stress-test of the financial system". Nature Climate Change. 7 (4): 283–288. doi:10.1038/nclimate3255. ISSN 1758-678X. Check date values in:
|date=(help) - ↑ Campiglio, Emanuele; Dafermos, Yannis; Monnin, Pierre; Ryan-Collins, Josh; Schotten, Guido; Tanaka, Misa (2018-06). "Climate change challenges for central banks and financial regulators". Nature Climate Change. 8 (6): 462–468. doi:10.1038/s41558-018-0175-0. ISSN 1758-678X. Check date values in:
|date=(help)