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Macroeconomic and environmental effects of portfolio decarbonisation strategies

Author

Listed:
  • Anna Bartocci

    (Bank of Italy)

  • Pietro Cova

    (Bank of Italy)

  • Valerio Nispi Landi

    (Bank of Italy)

  • Andrea Papetti

    (Bank of Italy)

  • Massimiliano Pisani

    (Bank of Italy)

Abstract

We show, using three different macroeconomic models, that portfolio decarbonisation strategies, by imposing tighter financing conditions on firms that can engage in both brown and green investments, may not reduce CO2 emissions or reduce them at the cost of output loss. On the contrary, portfolio decarbonisation strategies that selectively relax and tighten the financing conditions for, respectively, green and brown investments, could lower emissions and improve macroeconomic activity.

Suggested Citation

  • Anna Bartocci & Pietro Cova & Valerio Nispi Landi & Andrea Papetti & Massimiliano Pisani, 2024. "Macroeconomic and environmental effects of portfolio decarbonisation strategies," Questioni di Economia e Finanza (Occasional Papers) 874, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_874_24
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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2024-0874/QEF_874_24.pdf
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    More about this item

    Keywords

    portfolio decarbonisation strategy; financing conditions; green and brown investments; macroeconomic effects;
    All these keywords.

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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