“Financially constrained carbon management”
With the Lunch Seminar series, the Department of Finance is bringing eminent and up-and-coming researchers from around the world to Luxembourg.
Abstract
We develop a model studying how financing frictions affect a firm’s carbon footprint as well as its transition to sustainable technologies, while allowing for multiple types of green investment: abatement of carbon emissions, adoption of available technologies, and green innovation. Financing frictions impact each type of green investment differently—with abatement unaffected, a negative effect on adoption, and an ambiguous impact on green innovation. Financing frictions reduce current emissions by contracting production, but have a negative impact on the transition to greener technologies in firms relying mainly on adoption. We further show tilting strategies need not boost green innovation, exclusion strategies mainly curb current emissions, and subsidies to adoption help incentivize green innovation too.
About the speaker
Francesca Zucchi is a Senior Research Economist at the European Central Bank.
Language
English.
This is a free event. Registration is mandatory.
Cold lunches are provided to registered participants.
In partnership with
Supported by the Luxembourg National Research Fund (FNR) 17984041