‘Climate value at risk’ of global financial assets
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Climate change poses substantial financial risks to global assets measured in the trillions of dollars.
“Climate change poses a substantial financial risks to global assets measured in the trillions of dollars [185]”
From Tackling climate change with machine learning (2023) · cites this paper as [185]
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Financial Stability and Climate Change
Fabris, N. (2020) · Journal of Central Banking Theory and Practice · doi:10.2478/jcbtp-2020-0034 · Cited by 81 · see citing works
“Carbon Bombs” - Mapping key fossil fuel projects
Kühne, K., Bartsch, N., Tate, R. D., Higson, J., & Habet, A. (2022) · Energy Policy · doi:10.1016/j.enpol.2022.112950 · Cited by 79 · see citing works
Yang, L., & Hamori, S. (2021) · International Review of Financial Analysis · doi:10.1016/j.irfa.2021.101864 · Cited by 77 · see citing works
Are investors aware of climate-related transition risks? Evidence from mutual fund flows
Reboredo, J. C., & Otero, L. A. (2021) · Ecological Economics · doi:10.1016/j.ecolecon.2021.107148 · Cited by 75 · see citing works
The effect of climate news risk on uncertainties
Ye, L. (2022) · Technological Forecasting and Social Change · doi:10.1016/j.techfore.2022.121586 · Cited by 77 · see citing works
Will Green Finance Contribute to a Green Recovery? Evidence From Green Financial Pilot Zone in China
Hu, J., Li, J., Li, X., Liu, Y., Wang, W., & Zheng, L. (2021) · Frontiers in Public Health · doi:10.3389/fpubh.2021.794195 · Cited by 72 · see citing works
“Some other studies have proposed to incorporate green finance factors into traditional macro models (12–14) and thereby develop dynamic stochastic general equilibrium models (15–17) and integrated assessment models (18) used for interdisciplinary studies of economy, finance, and environment.”
BackgroundStranded Fossil Fuel Reserves and Firm Value
Atanasova, C., & Schwartz, E. S. (2019) · National Bureau of Economic Research · doi:10.3386/w26497 · Cited by 72 · see citing works
Carè, R., & Weber, O. (2023) · Research in International Business and Finance · doi:10.1016/j.ribaf.2023.101886 · Cited by 78 · see citing works
Stern, N. H., & Stiglitz, J. E. (2023) · Industrial and Corporate Change · doi:10.1093/icc/dtad008 · Cited by 75 · see citing works
“A wealth of recent evidence on climate risk and property values is consistent with the perspective that, at least in many cases, markets are underestimating climate risk (e.g., Dietz et al. , 2016; Battiston et al. , 2017; Monasterolo and De Angelis, 2020).”
Against Hybridism: Why We Need to Distinguish between Nature and Society, Now More than Ever
Malm, A. (2018) · Historical Materialism · doi:10.1163/1569206x-00001610 · Cited by 69 · see citing works
Reducing US Coal Emissions Can Boost Employment
Patrizio, P., Leduc, S., Kraxner, F., Fuss, S., Kindermann, G., Mesfun, S., Spokas, K., Mendoza‐Ponce, A., Dowell, N. M., Wetterlund, E., et al. (2018) · Joule · doi:10.1016/j.joule.2018.10.004 · Cited by 69 · see citing works
A Review of the Global Climate Finance Literature
Kouwenberg, R. R. P., & Zheng, C. (2023) · Sustainability · doi:10.3390/su15021255 · Cited by 69 · see citing works
“Dietz et al. [43] estimate that the expected loss of financial assets amounts to USD 2.5 trillion (1.8% of the assets’ value) in a baseline business-as-usual scenario.”
BackgroundMethodInfluentialCorporate climate risk and stock market reaction to performance briefings in China
Wu, N., Xiao, W.-G., Liu, W., & Zhang, Z.-P. (2022) · Environmental science and pollution research international · doi:10.1007/s11356-022-19479-2 · Cited by 59 · see citing works
Evolution of Green Finance: A Bibliometric Analysis through Complex Networks and Machine Learning
Maria, M. R., Ballini, R., & Souza, R. F. (2023) · Sustainability · doi:10.3390/su15020967 · Cited by 70 · see citing works
Quantifying the regional stranded asset risks from new coal plants under 1.5 °C
Edwards, M. R., Cui, R. Y., Bindl, M., Hultman, N., Mathur, K., McJeon, H. C., Iyer, G. C., Song, J., & Zhao, A. (2022) · Environmental Research Letters · doi:10.1088/1748-9326/ac4ec2 · Cited by 66 · see citing works
Healy, N., & Debski, J. (2016) · Local Environment · doi:10.1080/13549839.2016.1256382 · Cited by 66 · see citing works
Risk modelling of ESG (environmental, social, and governance), healthcare, and financial sectors
Chaudhry, S. M., Chen, X. H., Ahmed, R., & Nasir, M. A. (2023) · Risk Analysis · doi:10.1111/risa.14195 · Cited by 65 · see citing works
“According to Dietz et al. (2016), the projected “climate Value-at-Risk” under the business-as-usual scenario is US$2.5 trillion.”
InfluentialThe double materiality of climate physical and transition risks in the euro area
Gourdel, R., Monasterolo, I., Dunz, N., Mazzocchetti, A., & Parisi, L. (2024) · Journal of Financial Stability · doi:10.1016/j.jfs.2024.101233 · Cited by 63 · see citing works
Satellite Data and Machine Learning for Weather Risk Management and Food Security
Biffis, E., & Chavez, E. (2017) · Risk Analysis · doi:10.1111/risa.12847 · Cited by 68 · see citing works
The banking instability and climate change: Evidence from China
Zhang, X., Zhang, S., & Lu, L. (2021) · Energy Economics · doi:10.1016/j.eneco.2021.105787 · Cited by 64 · see citing works
Climate risk and IMF surveillance policy: a baseline analysis
Ramos, L. S., Gallagher, K. P., Stephenson, C., & Monasterolo, I. (2021) · Climate Policy · doi:10.1080/14693062.2021.2016363 · Cited by 64 · see citing works
“Losses can cascade on financial actors via adjustments in the value of securities and loans of the hit firms, leading to credit, insurance and sovereign risk (Dietz et al., 2016, Monasterolo, 2020a, Beirne et al., 2021).”
BackgroundFrom state to system: financialization and the water-energy-food-climate nexus
Schmidt, J. J., & Matthews, N. (2018) · Geoforum · doi:10.1016/j.geoforum.2018.03.001 · Cited by 73 · see citing works
Climate Risk and the Price of Audit Services: The Case of Drought
Truong, C., Garg, M., & Adrian, C. (2020) · Auditing A Journal of Practice & Theory · doi:10.2308/ajpt-18-097 · Cited by 63 · see citing works
Macrofinancial Risks of the Transition to a Low-Carbon Economy
Campiglio, E., & van der Ploeg, F. (2022) · Review of Environmental Economics and Policy · doi:10.1086/721016 · Cited by 63 · see citing works
“Hence, with some exceptions (e.g., Dietz et al. 2016), numerical IAMs are currently used mainly to provide reference emission, energy, and carbon price pathways that are then incorporated into other models that provide a more sophisticated representation of macrofinancial dynamics (Allen et al.…”
MethodClimate risk and the systemic risk of banks: A global perspective
Wu, B., Wen, F., Zhang, Y., & Huang, Z. (. (2024) · Journal of International Financial Markets Institutions and Money · doi:10.1016/j.intfin.2024.102030 · Cited by 63 · see citing works
Calabrese, R., Dombrowski, T., Mandel, A., Pace, R. K., & Zanin, L. (2021) · European Journal of Operational Research · doi:10.1016/j.ejor.2023.11.022 · Cited by 60 · see citing works
Quantifying the implied risk for newly-built coal plant to become stranded asset by carbon pricing
Mo, J., Cui, L., & Duan, H. (2021) · Energy Economics · doi:10.1016/j.eneco.2021.105286 · Cited by 57 · see citing works
- Authors
- Dietz, S., Bowen, A., Dixon, C., & Gradwell, P.
- Affiliations
- Vivid Economics (United Kingdom) (GB)
- Centre for Climate Change Economics and Policy (GB)
- Corresponding author
- Dietz, Simon
- ORCID
- Dietz, Simon
- Venue
- Nature Climate Change
- Published
- 2016-04-04
- Volume
- 6
- Issue
- 7
- Pages
- 676-679
- ISSN
- 1758-678X (ISSN-L)
- 1758-6798
- OpenAlex
- W2330768275
- Cited by
- 694
- References
- 33
- Citations by year
- 2026: 111 · 2025: 126 · 2024: 121 · 2023: 66 · 2022: 66 · 2021: 72 · 2020: 45 · 2019: 32 · 2018: 27 · 2017: 19 · 2016: 6 · 2015: 1
- FWCI
- 42.30
- Type
- journal article
- Language
- en
- Open access
- green
- orcid.org
- Licence
- www.springer.com/tdm (tdm)
- Locations
- Nature Climate Change (publishedVersion)
- London School of Economics and Political Science Research Online (London School of Economics and Political Science) (acceptedVersion)
- London School of Economics and Political Science Theses Online (London School of Economics and Political Science) (acceptedVersion)
- LSE Research Online Documents on Economics (submittedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Funders
- Grantham Foundation for the Protection of the Environment
- Economic and Social Research Council (ES/K006576/1)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Finance › Sustainable Finance and Green Bonds
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Climate Change Policy and Economics
- Physical Sciences › Environmental Science › Global and Planetary Change › Climate Change and Geoengineering
- Keywords
- financial assets, 2°C target, integrated assessment models, business-as-usual emissions, tail risk, mitigation costs, risk-neutral investors, risk-averse investors
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