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Climate Economics and Finance

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The research group on Climate Economics and Finance studies the dynamic interactions between socio-economic systems and climate sustainability, with a special focus on risk and finance.


We develop macroeconomic modelling (CGE, SFC and ABM) to address research questions linked to climate mitigation/adaptation strategies and their social, economic and financial implications. Recent outputs include:

  • ‘Climate financial bubbles. How market sentiments shape the transition to low-carbon capital’, MacroEconomic Dynamics, R&R (link)

  • ‘The EIRIN flow-of-funds behavioural model of green fiscal policies and green sovereign bonds’, Ecological Economics (link)

  • ‘Deep Impact: Geo-Simulations as a Policy Toolkit for Natural Disasters’. World Development 99: 395-418 (link)


We develop empirical work exploring the links between climate, finance and the transition to a low-carbon economy, with a particular focus on climate-related financial risks and portfolio assessment. Recent outputs include:

  • ‘Networks of stranded assets: A case for a balance sheet approach’, AFD Research Papers 2017-54 (link)

  • ‘Vulnerable yet relevant: the two dimensions of climate-related financial disclosure’, Climatic Change, forthcoming (link)

  • ‘The climate impact of quantitative easing’, Grantham Research Institute Policy Report (link)

  • ‘Fifty shades of green: Revisiting decoupling by economic sectors and air pollutants’, Ecological Economics 133: 111-126 (link)

  • ‘A climate stress-test of the financial system’, Nature Climate Change 7:283-288 (link)


We analyze and propose policies aimed at understanding the roles and limits of socio-economic and financial systems in shaping climate objectives and the Sustainable Development Goals (SDGs). Recent outputs include:

  • 'Finance and climate change: What role for central banks and financial regulators?’, Nature Climate Change, under review (link)

  • ‘The tightening links between financial systems and environmental issues’, in ‘Economic policies since the Global Financial Crisis’, Palgrave Macmillan, 313-356 (link)

  • ‘Opportunities for knowledge co-production across the energy-food-water nexus: Making interdisciplinary approaches work for better climate decision making’, Environmental Science & Policy (link)

  • ‘Identifying the policy space for climate loss and damage’, Science 354: 290-292 (link)

  • ‘Beyond carbon pricing: The role of banking and monetary policy in financing the transition to a low-carbon economy’, Ecological Economics 121: 220-230 (link)

Irene Monasterolo

Irene Monasterolo

Research Group Leader


Giacomo Bressan

Louison Cahen-Fourot

Steven Knauss

Asjad Naqvi