Carbon default swap – disentangling the exposure to carbon risk through CDS

Working paper by Alexander Blasberg, Rüdiger Kiesel, Luca Taschini on 27 Jan 2023

In this paper the authors use Credit Default Swap (CDS) spreads to construct a forward-looking, market-implied carbon risk factor and study how, where and when carbon risk affects firms’ creditworthiness by examining whether firms’ exposure to carbon risk is reflected in the market prices of their CDS contracts.

Optimal climate policy as if the transition matters

Working paper by Emanuele Campiglio, Simon Dietz, Frank Venmans on 14 Dec 2022

How best to make the transition from a high- to low-carbon economy remains open for debate, involving complex dynamics that go beyond basic models of emissions abatement. It is these dynamics that the authors aim to analyse with the model they develop in this paper, showing that it is optimal to repurpose and strand a substantial amount of capital.

Market failures and willingness to accept the smart energy transition: Experimental evidence from the UK

Research article by Greer Gosnell, Daire McCoy on 13 Dec 2022

This research uses a novel experiment to elicit the willingness to accept of 2,430 nationally representative UK households for smart meter installation. Randomized information treatments allow for assessment of the impact on adoption and willingness to accept of oft-cited market failures, namely imperfect information asymmetries and diffusion externalities

Fighting climate change: international attitudes towards climate policies

Working paper by Antoine Dechezleprêtre, Adrien Fabre, Tobias Kruse, Bluebery Planterose, Ana Sanchez Chico, Stefanie Stantcheva on 2 Dec 2022

This paper seeks to understand what drives support for or opposition to climate policies across the world. Evidence from an international survey reveals three key factors influence attitudes.