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The goal of this study is to analyse the correlation between the price of carbon within the EU ETS framework and the evolution of the ESG score of various European companies. In order to find consistent data, we focus on the companies of a selected number of sectors of the Euro Stoxx 600 index. By doing so, we have found on Refinitiv Eikon Datastream, a consistent set of ESG data of companies most susceptible to have been influcenced by the price of carbon within the EU ETS.
Lastly, we analyse the environmental and managerial actions companies can take and how they can impact their ESG scores in a carbon-pricing environment. As a result, we demonstrated that there exists a statistically significant positive impact of carbon price on the various ESG scores of carbon-intensive companies of the STOXX Europe 600 Index during the period 2008 to 2021.

ESG --- sustainable finance --- carbon pricing --- EU ETS --- Sciences économiques & de gestion > Finance

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This report provides an up-to-date overview of existing and emerging carbon pricing instruments around the world, including international, national and subnational initiatives. It also investigates trends surrounding the development and implementation of carbon pricing instruments and how they could accelerate the delivery of long-term mitigation goals. This edition also discusses the relation between policies that put an explicit price on carbon and policies that put an implicit price on carbon.

Carbon Finance --- Carbon Market --- Carbon Pricing --- Carbon Tax --- Clean Development Mechanism --- Climate Change --- Emissions Trading System --- International Climate Negotiations --- Paris Agreement --- Policy Alignment

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As the effects of climate change become increasingly evident, the design and implementation of climate-aware policies have assumed a more central role in the macroeconomic policy debate. With this has come an increasing recognition of the importance of introducing climate into the economic policy making tools used by central economic policy making agencies (such as ministries of finance and ministries of planning). This paper integrates climate outcomes into a macro-structural model for Pakistan, the kind of model that is suitable for use on a regular basis by ministry staff. The model includes the standard set of variables and economic logic that are necessary for the kinds of forecasting, economic policy, and budgetary planning analysis typically conducted by central ministries. In addition to standard outputs (unemployment, inflation, gross domestic product growth, and fiscal and current accounts), the model generates climate outcomes (tons of carbon emitted and economic and health damages due to higher temperatures and pollution). These outcomes are generated when specific climate policies such as mitigation are analyzed, but also when other policies are analyzed that might have unanticipated climate impacts. The paper describes the changes made to the World Bank's standard macro structural model, MFMod, in integrated climate outcomes, climate policies, and the economic impacts of climate on Pakistan's economy. Notably, carbon-tax scenarios show that a USD 20 carbon tax can reduce emissions in Pakistan by 36 percent by 2050. Gross domestic product impacts could also be positive, if the revenues from the carbon tax were used to reduce reliance on heavily distorting taxes. The model also quantifies associated co-benefits from reduced local air pollution and better health and productivity outcomes. In the absence of action to restrain climate change, the model suggests that increased temperatures and rain variability could reduce output by as much as 10 percent compared with a scenario where global temperature rises were minimized.

Adaptation To Climate Change --- Carbon Policy and Trading --- Carbon Pricing --- Climate Change --- Climate Change and Environment --- Climate Change Mitigation and Green House Gases --- Economic Modeling --- Environment --- Environmental Economics and Policies --- Macroeconomics and Economic Growth --- Taxation and Subsidies

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To finance the transition to low-carbon economies required to mitigate climate change, countries are increasingly using a combination of carbon pricing and green bonds. This paper studies the reasoning behind such policy mixes and the economic interaction effects that result from these different policy instruments. The paper models these interactions using an inter-temporal model that proposes burden sharing between current and future generations. The issuance of green bonds helps to enable immediate investment in climate change mitigation and adaptation, and the bonds would be repaid by future generations in such a way that those who benefit from reduced future environmental damage share in the burden of financing the mitigation efforts undertaken today. The paper examines the effects of combining green bonds and carbon pricing in a three-phase model and uses a numerical solution procedure that allows for finite-horizon solutions and phase changes. The paper shows that green bonds perform better when they are combined with carbon pricing. The proposed policy option appears to be politically more feasible than a green transition based only on carbon pricing, and it is more prudent for debt sustainability than a green transition that relies overly on green bonds.

Adaptation to Climate Change --- Carbon Policy and Trading --- Carbon Pricing --- Carbon Tax --- Climate Change --- Climate Change Adaptation --- Climate Change and Environment --- Climate Change Mitigation --- Climate Change Mitigation and Green House Gases --- Environment --- Green Bonds --- Green Issues --- International Burden Sharing

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This paper takes a dive into the deep literature on the carbon tax accumulated through active and continuous research over the past 30 years. It also presents the ongoing debate and implementation of the carbon tax in practice. The paper discusses the evolution of the carbon tax literature, classifying it by the issues investigated and methodology used for the investigation. It finds that the literature enlightens four key issues: (i) economic impacts, (ii) choices for revenue recycling, (iii) distributional implications, and (iv) competitiveness and border tax adjustment. Quantitative analysis, especially computable general equilibrium modeling, is the main method employed in the literature. The study shows that potential adverse economic impacts and competitiveness concerns are the main impediments to the introduction of the carbon tax. Extensive examinations of carbon tax issues at the global, regional, and country levels have led to innovative measures to address these concerns. While the carbon tax was mainly a subject of academic discussion until few years back, it has generated good attention for policy makers, particularly after the Paris Agreement on climate change, and is being considered as one of the main market instruments to address global climate change. Although several important issues related to the carbon tax have been well researched, its potential interactions with poverty and shared prosperity are yet to be investigated.

Border Tax Adjustment --- Carbon Pricing --- Carbon Tax --- Climate Change --- Climate Change and Environment --- Climate Change and Health --- Climate Change Mitigation and Green House Gases --- Distributional Impacts --- Economic Impacts --- Energy --- Energy and Environment --- Energy Demand --- Environment --- Health, Nutrition and Population --- Revenue Recycling --- Science and Technology Development --- Science of Climate Change