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Climate Change and Financial Policy: A Literature Review

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Abstract

This article reviews the rapidly proliferating economic literature on climate change and financial policy. We find: (1) enduring challenges in estimating the statistical properties of a changed climate; (2) emerging evidence of financial markets pricing in climate-related risks; and (3) a range of significant institutional distortions preventing such pricing from being complete. Finally, we argue that geographic regions may be an especially fruitful unit of analysis for understanding the financial impact of climate change.

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  • Benjamin Dennis, 2022. "Climate Change and Financial Policy: A Literature Review," Finance and Economics Discussion Series 2022-048, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgfe:2022-48
    DOI: 10.17016/FEDS.2022.048
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    More about this item

    Keywords

    Climate change; Climate-finance; Climate-related risk;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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