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Financial Crises and Climate Change

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  • João Tovar Jalles

Abstract

We empirically assess by means of the local projection method, the impact of financial crises on climate change vulnerability and resilience. Using a new dataset covering 178 countries over the period 1995–2017, we observe that resilience to climate change shocks has been increasing and that advanced economies are the least vulnerable. Our econometric results suggest that financial crises (particularly systematic banking ones) tend to lead to a short-run deterioration in a country´s resilience to climate change. This effect is more pronounced in developing economies. In downturns, if an economy is hit by a financial crisis, climate change vulnerability increases. Results are robust to several sensitivity checks.

Suggested Citation

  • João Tovar Jalles, 2020. "Financial Crises and Climate Change," Working Papers REM 2020/0131, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    • Handle: RePEc:ise:remwps:wp01312020
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    More about this item

    Keywords

    climate change; vulnerability; resilience; local projection method; impulse response functions; recessions; financial crises;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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