Climate change and government borrowing costs : a triple whammy for emerging market economies
Autor(a) principal: | |
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Data de Publicação: | 2023 |
Outros Autores: | , , |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10400.5/29136 |
Resumo: | Climate change is a systemic risk to the global economy. While there is a large body of literature documenting the potential economic consequences of climate change, there is relatively little research on the link between vulnerabilities to climate change, the buildup of climate debt by countries with historically large carbon dioxide emissions, and how well financial markets incorporate (or not) these risks to sovereign governments. This paper investigates the impact of both climate debt and climate vulnerabiities/resiliency on sovereign bond yields and spreads in advanced and emerging market economies, using a novel dataset. We find that changes in climate debt are an important determinant of spreads, but only in emerging market economies. Countries with high vulnerabilities and low resilency to climate change also pay higher spreads. This implies a triple whammy of challenges for emerging market economies as they confront the economic damages of climate change, the high fiscal costs of climate adaptation, and high borrowing costs. |
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Climate change and government borrowing costs : a triple whammy for emerging market economiesclimate change vulnerabilitygovernment bond spreadssovereign riskpanel datasocial cost of carbonClimate change is a systemic risk to the global economy. While there is a large body of literature documenting the potential economic consequences of climate change, there is relatively little research on the link between vulnerabilities to climate change, the buildup of climate debt by countries with historically large carbon dioxide emissions, and how well financial markets incorporate (or not) these risks to sovereign governments. This paper investigates the impact of both climate debt and climate vulnerabiities/resiliency on sovereign bond yields and spreads in advanced and emerging market economies, using a novel dataset. We find that changes in climate debt are an important determinant of spreads, but only in emerging market economies. Countries with high vulnerabilities and low resilency to climate change also pay higher spreads. This implies a triple whammy of challenges for emerging market economies as they confront the economic damages of climate change, the high fiscal costs of climate adaptation, and high borrowing costs.ISEG - REM - Research in Economics and MathematicsRepositório da Universidade de LisboaClements, BenedictGupta, SanjeevJalles, JoãoAdrogue, Bernat2023-10-27T09:54:10Z2023-102023-10-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.5/29136engClements, Benedict ... [et al.] (2023). "Climate change and government borrowing costs : a triple whammy for emerging market economies". REM Working paper series, nº 0294/20232184-108Xinfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-10-29T01:30:57Zoai:www.repository.utl.pt:10400.5/29136Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T21:26:06.115252Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Climate change and government borrowing costs : a triple whammy for emerging market economies |
title |
Climate change and government borrowing costs : a triple whammy for emerging market economies |
spellingShingle |
Climate change and government borrowing costs : a triple whammy for emerging market economies Clements, Benedict climate change vulnerability government bond spreads sovereign risk panel data social cost of carbon |
title_short |
Climate change and government borrowing costs : a triple whammy for emerging market economies |
title_full |
Climate change and government borrowing costs : a triple whammy for emerging market economies |
title_fullStr |
Climate change and government borrowing costs : a triple whammy for emerging market economies |
title_full_unstemmed |
Climate change and government borrowing costs : a triple whammy for emerging market economies |
title_sort |
Climate change and government borrowing costs : a triple whammy for emerging market economies |
author |
Clements, Benedict |
author_facet |
Clements, Benedict Gupta, Sanjeev Jalles, João Adrogue, Bernat |
author_role |
author |
author2 |
Gupta, Sanjeev Jalles, João Adrogue, Bernat |
author2_role |
author author author |
dc.contributor.none.fl_str_mv |
Repositório da Universidade de Lisboa |
dc.contributor.author.fl_str_mv |
Clements, Benedict Gupta, Sanjeev Jalles, João Adrogue, Bernat |
dc.subject.por.fl_str_mv |
climate change vulnerability government bond spreads sovereign risk panel data social cost of carbon |
topic |
climate change vulnerability government bond spreads sovereign risk panel data social cost of carbon |
description |
Climate change is a systemic risk to the global economy. While there is a large body of literature documenting the potential economic consequences of climate change, there is relatively little research on the link between vulnerabilities to climate change, the buildup of climate debt by countries with historically large carbon dioxide emissions, and how well financial markets incorporate (or not) these risks to sovereign governments. This paper investigates the impact of both climate debt and climate vulnerabiities/resiliency on sovereign bond yields and spreads in advanced and emerging market economies, using a novel dataset. We find that changes in climate debt are an important determinant of spreads, but only in emerging market economies. Countries with high vulnerabilities and low resilency to climate change also pay higher spreads. This implies a triple whammy of challenges for emerging market economies as they confront the economic damages of climate change, the high fiscal costs of climate adaptation, and high borrowing costs. |
publishDate |
2023 |
dc.date.none.fl_str_mv |
2023-10-27T09:54:10Z 2023-10 2023-10-01T00:00:00Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10400.5/29136 |
url |
http://hdl.handle.net/10400.5/29136 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
Clements, Benedict ... [et al.] (2023). "Climate change and government borrowing costs : a triple whammy for emerging market economies". REM Working paper series, nº 0294/2023 2184-108X |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
ISEG - REM - Research in Economics and Mathematics |
publisher.none.fl_str_mv |
ISEG - REM - Research in Economics and Mathematics |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
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Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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RCAAP |
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RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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1799134142589304832 |