Crisis and opportunity: Transforming climate governance for SMEs

Small and medium-sized enterprises (SMEs) are key actors in climate change mitigation and adaptation. Their aggregate emissions are significant, and they are disproportionately affected by climate impacts, including extreme weather events. SMEs also play a vital role in shaping the environmental behaviours of individuals, communities, and other businesses. However, these organisations have been largely neglected by climate policies across all levels of government. A series of global crises, including the COVID-19 pandemic, war in Europe and the Middle East, and energy price spikes, have posed an existential threat to millions of SMEs, while also acting as a catalyst for the reconfiguration of the social contract between business, society and the state, both temporary and more long-term. In this article, we make the case for increased focus on the governance of SME decarbonisation to address this turbulent context. We outline key challenges facing public policymakers and other governance actors, compare strategic options, identify evidence gaps that hinder effective interventions, and highlight implications for research. In doing so we set out key elements of a renewed social contract for business, society and state relations.

Hedging potentials of green investments against climate and oil market risks

PurposeThis study aims to examine the ability of clean energy stocks to provide cover for investors against market risks related to climate change and disturbances in the oil market.Design/methodology/approachThe study adopts the feasible quasi generalized least squares technique to estimate a predictive model based on Westerlund and Narayan's (2015) approach to evaluating the hedging effectiveness of clean energy stocks. The out-of-sample forecast evaluations of the oil risk-based and climate risk-based clean energy predictive models are explored using Clark and West's model (2007) and a modified Diebold & Mariano forecast evaluation test for nested and non-nested models, respectively.FindingsThe study finds ample evidence that clean energy stocks may hedge against oil market risks. This result is robust to alternative measures of oil risk and holds when applied to data from the COVID-19 pandemic. In contrast, the hedging effectiveness of clean energy against climate risks is limited to 4 of the 6 clean energy indices and restricted to climate risk measured with climate policy uncertainty.Originality/valueThe study contributes to the literature by providing extensive analysis of hedging effectiveness of several clean energy indices (global, the United States (US), Europe and Asia) and sectoral clean energy indices (solar and wind) against oil market and climate risks using various measures of oil risk (WTI (West Texas intermediate) and Brent volatility) and climate risk (climate policy uncertainty and energy and environmental regulation) as predictors. It also conducts forecast evaluations of the clean energy predictive models for nested and non-nested models.

Our Children Will Fight for the Climate: How Congo-Basin Writers Prophesied Global Youth Climate Activism 1

According to Riikka Paloniemi and Annukka Vainio (2011), as early as 1992, the United Nations in its international programme dubbed Agenda 21 asserted that young people, who constitute about 30 percent of the world's population, are important stakeholders in achieving sustainable development (398-399). Much momentum has accumulated in the direction of youth activism for the climate and environment. Besides garnering much recognition from the international community as important actors in climate change policy and action, youth-led climate commitment has continued to grow in leaps and bounds. Before the Covid-19 pandemic, this movement mobilized millions of school-going children/youths across many cities throughout the world to skip classes on Fridays and protest, asking their governments and corporate bodies to concretely address the global climate and environmental crises and save their future.2 Greta Thunberg has spoken to world leaders on the need to curb carbon emissions and has addressed the issue of climate change at many high-level gatherings, including COP24, which was held from in December 2018 in Katowice, Poland;the World Economic Forum in Davos, Switzerland, in January 2019 and 2020;the European Economic and Social Committee and the European Commission in February 2019;an audience with Pope Francis at the Vatican in April 2019;and the UK Parliament in Westminster, also in April 2019. [...]the School Strikes for Climate movement has not only caused the resignation of Belgian Environment Minister Joke Schauvliege (who had falsely claimed that children's climate protests were 'set-up') but has also been positively received by key global figures such as UN Secretary General António Guterres, who, following an unprecedented turnout of approximately 1.4 million young protesters in over 120 countries on 15th March 2019, remarked that "the climate strikers should inspire us all to act at the next UN summit".3 Moreover, on 12th April 2019, having witnessed the massive turnout of young protesters the month before, twenty-two renowned scientists across the globe published a letter in the journal Science acknowledging that "the concerns of young protesters are justified" and pledging their support for the youth strikes for climate (Hagedorn et al. 2019, 139-140).

A POST-COVID-19 ECONOMIC ASSESSMENT OF THE CHILEAN NDC REVISION

Last year, Chile updated its Nationally Determined Contributions, moving from intensity-based emissions reductions to an effective emissions target. This paper aims to assess the economic and environmental impacts of this change in the current context of high uncertainty Chile faces with social protests and the COVID-19 pandemic. Using the computable general equilibrium model GEMINI-E3, we performed a sensitivity analysis assuming different levels of economic growth through 2030. Though at first glance the revised commitments appear more ambitious, we found that they could lead to higher emissions in low-growth scenarios. The results show that intensity-based emissions targets indeed become less stringent when assuming high levels of economic growth and thus may result in highly uncertain effective emissions in 2030. On the other hand, given the uncertainty surrounding Chilean economic growth, the updated commitments would be politically more amenable as it would lead to lower welfare losses. In addition, we analyze different redistribution schemes of a CO2 tax and we show that a per capita redistribution rule makes the CO2 tax more progressive and thus fiscally more acceptable.

The Politics of Intersecting Crises: The Effect of the COVID-19 Pandemic on Climate Policy Preferences

Few contemporary crises have reshaped public policy as dramatically as the COVID-19 pandemic. In its shadow, policymakers have debated whether other pressing crises—including climate change—should be integrated into COVID-19 policy responses. Public support for such an approach is unclear: the COVID-19 crisis might eclipse public concern for other policy problems, or complementarities between COVID-19 and other issues could boost support for broad government interventions. In this research note, we use a conjoint experiment, panel study, and framing experiment to assess the substitutability or complementarity of COVID-19 and climate change among US and Canadian publics. We find no evidence that the COVID-19 crisis crowds out public concern about the climate crisis. Instead, we find that the publics in both countries prefer that their governments integrate climate action into COVID-19 responses. We also find evidence that analogizing climate change with COVID-19 may increase concern about climate change.

The time-varying impact of uncertainty on oil market fear: Does climate policy uncertainty matter?

Implied volatility index is a popular proxy for market fear. This paper uses the oil implied volatility index (OVX) to investigate the impact of different uncertainty measures on oil market fear. Our uncertainty measures consider multiple perspectives, specifically including climate policy uncertainty (CPU), geopolitical risk (GPR), economic policy uncertainty (EPU), and equity market volatility (EMV). Based on the time-varying parameter vector autoregression (TVP-VAR) model, our empirical results show that the impact of CPU, GPR, EPU, and EMV on OVX is time-varying and heterogeneous due to these uncertainty measures containing different information content. In particular, the CPU has become increasingly important for triggering oil market fear since the recent Paris Agreement. During the COVID-19 pandemic, CPU, EPU, and EMV, rather than GPR, play a prominent role in increasing oil market fear. © 2023 Elsevier Ltd

Competing Crises? Media Coverage and Framing of Climate Change During the COVID-19 Pandemic

The COVID-19 pandemic emerged against the backdrop of the longer-term climate change crisis and increasing global awareness of the imperative for climate action, disrupting the post-Paris trajectory of climate policy and media coverage of climate change. We examine news media coverage from Canadian legacy newspapers and answer three questions. First, did the COVID-19 pandemic work as a critical event in its impacts on news media coverage of climate change, and if so, in what ways? Second, did media framing of climate change shift in response to this critical event, and if so, in what ways? Third, are there notable differences between national and subnational media frames? We find that COVID-19 is a critical event linked to a period of reduced media coverage of climate change. However, this critical event also opened new spaces for news framing that connects environmental and economic dimensions of sustainability.

Research on the emission reduction effects of carbon trading mechanism on power industry: plant-level evidence from China

PurposeCarbon trading mechanism has been adopted to foster the green transformation of the economy on a global scale, but its effectiveness for the power industry remains controversial. Given that energy-related greenhouse gas emissions account for most of all anthropogenic emissions, this paper aims to evaluate the effectiveness of this trading mechanism at the plant level to support relevant decision-making and mechanism design.Design/methodology/approachThis paper constructs a novel spatiotemporal data set by matching satellite-based high-resolution (1 × 1 km) CO2 and PM2.5 emission data with accurate geolocation of power plants. It then applies a difference-in-differences model to analyse the impact of carbon trading mechanism on emission reduction for the power industry in China from 2007 to 2016.FindingsResults suggest that the carbon trading mechanism induces 2.7% of CO2 emission reduction and 6.7% of PM2.5 emission reduction in power plants in pilot areas on average. However, the reduction effect is significant only in coal-fired power plants but not in gas-fired power plants. Besides, the reduction effect is significant for power plants operated with different technologies and is more pronounced for those with outdated production technology, indicating the strong potential for green development of backward power plants. The reduction effect is also more intense for power plants without affiliation relationships than those affiliated with particular manufacturers.Originality/valueThis paper identifies the causal relationship between the carbon trading mechanism and emission reduction in the power industry by providing an innovative methodology for identifying plant-level emissions based on high-resolution satellite data, which has been practically absent in previous studies. It serves as a reference for stakeholders involved in detailed policy formulation and execution, including policymakers, power plant managers and green investors.

Routes to a Resilient European Union: Interdisciplinary European Studies

The fifth volume of the Interdisciplinary European Studies series aims to explore the EUs pursuit of societal resilience and its role in the transition to a green economy. It brings together scholars from economics, law, and political science to provide insights related to climate change and the protection of the environment, the role of innovation in the green economy, resilience of national public health systems after the COVID-19 pandemic, regulatory resilience in the face of financial instability, and immigration. All chapters are based on up-to-date research, succinct assessment of the current state of affairs, and ongoing debates. They conclude with policy recommendations for decision-makers on European and national levels. Legal Preconditions for an Environmentally Sustainable European Union is available open access under a Creative Commons Attribution 4.0 International License via link.springer.com. © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2022, corrected publication 2022.

The COVID-19 pandemic: opportunity or challenge for climate change risk disclosure?

PurposeThe purpose of this paper is to reflect on how climate change risk reporting might evolve in various world regions in the post COVID-19 pandemic era.Design/methodology/approachUsing a multiple-case study approach and adopting an institutional theory lens, we assess whether the pandemic is likely to strengthen or weaken institutional pressures for climate change risk disclosures and predict how climate-related risk reporting will evolve post-pandemic.FindingsThe authors find that climate change risk reporting is likely to evolve differently according to geographical location. The authors predict that disclosure levels will increase in regions with ambitious climate policy and where economic stimulus packages support sustainable economic recovery. Where there has been a weakening of environmental commitments and economic stimulus packages support resource intensive business, climate change risk reporting will stagnate or even decline. The authors discuss the scenarios for climate change risk reporting expected to play out in different parts of the world.Originality/valueThe authors contribute to the nascent literature on climate change risk disclosure and identify future directions in the wake of the COVID-19 pandemic.

Fossil fuels subsidy removal and the EU carbon neutrality policy

The complexity of the EU carbon neutrality policy is addressed by evaluating the impacts of the interaction among different policy instruments. An energy-economic dynamic CGE model based on GTAP utilities is developed for simulating different policy scenarios starting from a business as usual case where the economic impacts related to the COVID-19 pandemic and recovery measures are included. The instruments tested as part of the EU climate strategy are the removal of fossil-fuel consumption subsidies, a carbon pricing mechanism and the public support to clean energy technologies. The modelling approach is based on a revenue recycling mechanism to finance clean energy technologies. We find that the simultaneous implementation of all instruments under the EU climate strategy including the removal of subsidies to fossil fuels and the reuse of revenues to foster the technological transition of the energy system is a win-win solution for a sustainable and decarbonised EU economy. © 2023 The Author(s)

Microalgal Carbon Dioxide (CO2) Capture and Utilization from the European Union Perspective

The increasing concentration of anthropogenic CO2 in the atmosphere is causing a global environmental crisis, forcing significant reductions in emissions. Among the existing CO2 capture technologies, microalgae-guided sequestration is seen as one of the more promising and sustainable solutions. The present review article compares CO2 emissions in the EU with other global economies, and outlines EU's climate policy together with current and proposed EU climate regulations. Furthermore, it summarizes the current state of knowledge on controlled microalgal cultures, indicates the importance of CO2 phycoremediation methods, and assesses the importance of microalgae-based systems for long-term storage and utilization of CO2. It also outlines how far microalgae technologies within the EU have developed on the quantitative and technological levels, together with prospects for future development. The literature overview has shown that large-scale take-up of technological solutions for the production and use of microalgal biomass is hampered by economic, technological, and legal barriers. Unsuitable climate conditions are an additional impediment, forcing operators to implement technologies that maintain appropriate temperature and lighting conditions in photobioreactors, considerably driving up the associated investment and operational costs.

Selected trends of the central bank

The role of central banks is constantly evolving, also in response to the changing market, institutional and political conditions. Crisis phenomena act as a special incentive to change. This is the case of the financial crises of 2007+ and 2020+ (the Covid crisis). Observation of the central banks' evolution – also in reaction to the crisis phenomena – leads to the conclusion that central banks are currently responsible not only for implementing monetary policies but also – increasingly – for providing support to economic policies. The aim of this article is to define the modern role of central banks, taking into consideration the acceleration of global changes in the field of digitalisation and climate policy. Special attention is paid to currency digitalisation, in particular to the consequences of central bank currency digitalisation. The paper also verifies the hypotheses of the far-reaching consequences for the model of banking system operation, following from the implementation of central bank digital currency. Moreover, the article verifies the hypothesis of the growing role of central banks in shaping economic (climate) policy. The potential impact of currency digitalisation and central banks' engagement in climate policy on their position and autonomy is also analysed. The intention of this article is to promote the author's observations on the challenges that central banks are facing at the time of current transformations. This paper also opens up an opportunity for future, in-depth studies and analyses (especially in the case of widespread implementation of the trends described herein). In the article, the author relies on the method of critical analysis of the literature and available sources, descriptive and comparative studies and a case study. The author's analysis of EU central banks' websites has shown that seven banks do not publish documents/reports or information about central bank digital currency, while only three of them do not publish documents, reports, studies or press releases referring to the issues of climate protection or climate policy or the so called green financing/investment projects. It should be emphasized that the subject matter is quite novel and has not been widely presented in the literature yet. Moreover, we know only of single implementation cases, or rather attempts at implementation of the presented trends, in the practice of central banking. Meanwhile, the engagement of central banks in energy transition – especially in its indirect financing – is a political decision and involves, among others, the risk of reducing the autonomy of central banks. Widespread implementation of central bank digital currency, on the other hand, increases the importance of central banks as issuers, monetary and economic policy creators as well as depositaries. This also affects the model of banking sector operation, including reduction of the banks' role and lesser importance of deposits as a source of banking activity financing. © 2022 Narodowy Bank Polski. All rights reserved.

Climate policy and the concept of co-benefits in India.

Until the late 1990s, developing countries had perceived the pursuit of development as coming into conflict with the mitigation of climate change. Research showed that mitigation and development can go hand in hand, giving rise to the co-benefits approach. In this paper, the relationship between aiming for development and aiming for climate change mitigation is analyzed from the perspective of the developing country India. While industrialized countries prefer the approach of co-benefits of mitigation, developing countries tend to follow the development-first paradigm with mitigation co-benefits, as a literature and document study show. India had a long way to come from the notion that mitigation was threatening economic growth to adopting the co-benefits approach. The paradigms of "differentiated responsibilities" and of having a right to emit as much as the industrialized countries are deeply rooted. This is also shown by India's reaction to the current economic crisis caused by the COVID-19 pandemic.

Climate policy uncertainty and stock market volatility: Evidence from different sectors

This paper mainly investigates whether the climate policy uncertainty index (CPU) can predict the volatility of Chinese stock market volatility considering different sectors. Out-of-sample results show that climate policy uncertainty index can have a greater effect on the utility sector. We also investigate the effects of CPU based on longer horizons, different volatility levels and the COVID-19 pandemic. This paper tries to provide new evidence based on sector stock indices. © 2022

Key Aspects of Climate Strategies in Europe

Climate change is one of the main challenges and threats of the 21st century. Accordingly, the analysis in this study is based on the conceptual economic strategy of the United Nations Green Economy. Attention is paid to topical issues on the problem of climate change, since the COVID-19 pandemic has significantly affected human economic activities. For this study, three European Union member states have been selected for their economic performance and economic development: Germany, France and Italy. According to the statistics of the International Monetary Fund for 2020, the data on the GDP of these countries is the highest. Compared to other member states, the selected countries have the largest population. Moreover, the leaders of the three states have repeatedly expressed their concern about the problem of climate change. The paper provides a brief analysis of the most important international conferences devoted to the climate problem, as well as a comparison of the main approaches in relation to anthropological factors causing climate change. Unfortunately, the climate agenda is still viewed by some industrialists, government elites and energy sector businessmen as less significant than economic benefits. Academic circles are also divided and many believe that the transition to "green rails” is not feasible at the moment and the climate issue can be postponed. Thus, economic reforms, compliance with environmental recommendations, the introduction of legal and institutional mechanisms and methods remain under the responsibility of each state separately. The avoidance and reluctance of transformations allows us to speak about the initial stage of the formation of awareness of the climate threat. © 2023, The Author(s), under exclusive license to Springer Nature Switzerland AG.

Effects of COVID-19 on civil society voices in European energy and climate policy

Civil society plays an important role in European energy and climate policymaking. This paper poses the questions of how organized civil society handled the opportunities and challenges presented by the lockdown to its access to the climate and energy policymaking within the European Commission (EC)? How has the balance between organized civil society groups and businesses in Europe been affected by pandemic-related travel restrictions? Moreover, what role has the EC played in creating such opportunities and affecting the legitimacy of democratic policymaking? This research sheds light on the changing role of the EC in democratic governance and policy formation in the European Union (EU) by examining the relationship between funding received by CSOs active in the policy areas of environment and climate, the number of meetings attended, and the importance of coalitions and networks. This research revealed a possible relationship between level of participation in policymaking and the operational support received from the EC. Despite the resources invested, opportunities for interest representation in the energy and climate policy areas disproportionately favor businesses and organizations with long-term relationships with and proximity to Brussels. Increased number of virtual meetings only marginally increased share of participation of NGOs in these meetings. Thus, a physical presence in Brussels and resource investment remain important factors in access to the EU policymaking. © 2023 Elsevier Ltd

Renewable energy creditors versus renewable energy debtors: Seeking a pattern in a sustainable energy transition during the climate crisis

Considering unpredictable and hastily evolving tipping points (like the impacts of the COVID-19 pandemic, ongoing climate crisis and the war in Ukraine), it is clear that sustainable energy transition and utilization of locally sourced renewable energies must be in the heart of both national, regional, and local energy systems. However, if we take a closer look at the actions undertaken at the local (communal) level, we see enormous diversity of patterns, prerequisites, and implications that drive and affect spatial deployment of renewable energies. Therefore, our research targets to better comprehend the question if individual communities are comparatively involved in the energy transition. We also ask whether the demand and supply of renewable energy is territorially balanced and how these differences (if any) can be justified. We are framing our research by the concepts of energy justice and ecological debt. We thoroughly explore and asses the renewable energy balance on the level of individual communities which is based on data on the installed power capacity potentials and energy consumption in local administration units in Poland (380). Spatial distribution and discrepancies in the deployment of the renewable energy creditors and the renewable energy debtors are detected. Noticeable disproportions were identified among communities where improved utilization of local potential of renewable energy could exceed energy demand (29% of communities). This result is contrasting with communities (71% of communities) that can be, on the other hand, classified as renewable energy debtors. We claim that insufficient support (institution, regulatory, and financial) for expanding local renewable energy systems is a clear barrier when adapting to the climate crisis by balancing the energy demand and supply at the local level.