User:Jvaughan24/Climate finance

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This page will give some background on the goals of climate change as well as some of the economic costs associated with climate change.

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Goals of Climate Finance:

Climate Finance works to provide the necessary monetary backing to fight the adverse affects of climate change. It connects government intervention with the private sector to develop innovative climate change solutions. Some of these include pollutant purification, energy efficiency, and infrastructure.

Economic Costs of Climate Change:

Temperature increase:

Experts speculate that if global temperatures rise by 3.2°C, this could decrease world GDP by up to 18% This decline could be limited to 4% if targets set in Paris Agreement are met.

Sea Level Rise:

This would entail more frequent and severe flooding in coastal regions and it has the potential to cause damages in the trillions of dollars as well as threatens countless lives of those living in coastal regions.

Natural Disasters:

These include earthquakes, forest fires, mudslides, droughts, and other natural phenomena. These have cost the world $640.3 billion over the past 5 years.

Current Funding of Renewables and Green Alternatives:

Some estimates say $100 billion is required each year to fund required climate investments. However, most countries don’t have the resources, which requires wealthier developed nations to contribute the most. Also, it is important to note that the amount of money that could be lost due to the events of climate change likely outweighs the amount necessary to implement sustainable initiatives

Financial Incentive/Disincentives:

A Carbon Tax is a price set by government that companies and consumers must pay for each ton of greenhouse gas emitted. There are two types of carbon taxes that include an emissions tax and a goods tax. Another concept is anEmissions Trading System(ETS) which puts a market price on emissions and creates a cap on total emissions allowances while letting companies buy/sell these allowances. Reducing subsidies to oil companies is also an important way to mitigate the effects of climate change. Subsidies reduce the price of fossil fuels which encourages consumption of these fuels and in turn increases emissions. 53 countries recently reformed fossil fuels subsidies, however annual subsidies still amount to almost half a trillion dollars.

References:
Hong, Harrison, G. Andrew Karolyi, and José A. Scheinkman. "Climate finance." The Review of Financial Studies 33.3 (2020): 1011-1023.

Buchner, Barbara, et al. "Global landscape of climate finance 2019." (2019).

Clapp, Christa, et al. "Tracking climate finance: what and how?." (2012).