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climate finance class 2020

March 16: Climate Change and Financial Stability

As UM has announced, we will not be having class this week. I plan to cover the material we are studying largely through video lectures combined with answering questions you may have via email. You can also post comments via the blog. I hope you are all doing well.

The coronavirus is providing a dramatic example of how risks that are not primarily financial risks can have an impact on the financial system. After the 2008 financial crisis financial regulators and central banks around the world started to focus on issues relating to financial stability. As usual this sort of thinking tends to start with the issues that caused the last crisis or scandal, but as the new financial stability thinking developed it became clear that it would encompass a range of different risks arising inside and outside the financial system. I wrote a draft paper on Climate Change and Brexit as Financial Stability Risks (July 2017 version) (this is not required reading for the class). One issue that interests me is the distinction between factors that involve potential financial stability risks and those that involve actual problems for financial stability. And how risks move from the potential to the actual categories.

The paper I am assigning for our next class looks at the complexities of thinking about climate change related risks to financial stability. But as we are seeing dramatic falls in stock markets in response to the coronavirus (which clearly has economic impacts on businesses that depend on supply chains disrupted by the virus and on industries related to travel, such as airlines, hotels, and restaurants) we are in the middle of a live example of sudden onset financial stability problems.

Patrick Bolton, Morgan Després, Luiz Awazu Pereira da Silva, Frédéric Samama and Romain Svartzman, The Green Swan: Central Banking and Financial Stability in the Age of Climate Change Jan. 20, 2020 (115 pp)

March 2: The Idea of Sustainable Finance
March 16: Climate Change and Financial Stability
March 23: Fossil Fuel Divestment
March 30: Securities Laws and Climate-related Securities Disclosures
April 6: Asset Management and Sustainable Finance
April 13: Green Bonds
April 20: Third Party Litigation Funding and Climate Lawsuits

March 2: The Idea of Sustainable Finance

I am looking forward to beginning this class on Monday. My aim for the first class session is to begin to think about sustainable finance, a topic which is becoming more and more visible in the financial press. The readings I have assigned for this first session are authored by different actors: it is interesting to note that business groups are talking about issues of the climate and finance in similar ways to some governmental actors. I’d like to begin by learning about you and your background and interests in this area.

Here are the Class Policies.

Recognizing the duty of the Federal Government to create a Green New
Deal
, 116th Congress, 1st Session H. Res.. 109 (Feb. 7, 2019) (14 pp)

Mark Carney, Governor of the Bank of England, A New Horizon, Speech at the European Commission Conference: a Global Approach to Sustainable Finance (Mar. 21, 2019) (12 pp)

Mark Carney, Governor of the Bank of England, Remarks given during the UN Secretary General’s Climate Action Summit 2019 (22 and 23 Sep. 2019) (10 pp)

International Chambers of Commerce, Re: a Policy Agenda to Mobilize Finance for People, Planet and Prosperity (Dec. 5, 2019) (4 pp)

Business for Nature, High-level Policy Recommendations (Jan. 21, 2020) (5 pp)

EU Commission Communication, Annual Sustainable Growth Strategy 2020
COM/2019/650 final Dec. 17, 2019 (16 pp)

March 10th: I have added an introductory framing for the reading for our next class. I will be adding more materials for future classes later this week. I hope you are enjoying the break.

March 16: Climate Change and Financial Stability

The coronavirus is providing a dramatic example of how risks that are not primarily financial risks can have an impact on the financial system. After the 2008 financial crisis financial regulators and central banks around the world started to focus on issues relating to financial stability. As usual this sort of thinking tends to start with the issues that caused the last crisis or scandal, but as the new financial stability thinking developed it became clear that it would encompass a range of different risks arising inside and outside the financial system. I wrote a draft paper on Climate Change and Brexit as Financial Stability Risks (July 2017 version) (this is not required reading for the class). One issue that interests me is the distinction between factors that involve potential financial stability risks and those that involve actual problems for financial stability. And how risks move from the potential to the actual categories.

The paper I am assigning for our next class looks at the complexities of thinking about climate change related risks to financial stability. But as we are seeing dramatic falls in stock markets in response to the coronavirus (which clearly has economic impacts on businesses that depend on supply chains disrupted by the virus and on industries related to travel, such as airlines, hotels, and restaurants) we are in the middle of a live example of sudden onset financial stability problems.

Patrick Bolton, Morgan Després, Luiz Awazu Pereira da Silva, Frédéric Samama and Romain Svartzman, The Green Swan: Central Banking and Financial Stability in the Age of Climate Change Jan. 20, 2020 (115 pp)

March 23: Fossil Fuel Divestment

 

March 30: Securities Laws and Climate-related Securities Disclosures


April 6: Asset Management and Sustainable Finance


April 13: Green Bonds


April 20: Third Party Litigation Funding and Climate Lawsuits