Digitalisation of the energy transition

To achieve the desired decarbonisation of the German economy, a stronger integration of the electricity, heat and transport sectors is needed.
Digitalisation can play a key role in this process, e.g. in the fields of energy efficiency and the integration of renewables. The legal framework for the digitalization of the energy transition, is currently being developed. This short study of GCF and GeSI gives an overview of the current status of legislation and policy that link the digital and the energy world. In addition, the study assesses where the legal framework is already well developed and where adjustments are necessary.

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A stag hunt for green investment

To achieve the goal of keeping global warming well below 2 °C, private investors have to shift capital from brown to green infrastructures and technologies and provide additional green investment. In this paper, we present a game-theoretic perspective on the challenge of triggering such investments. The question of climate change mitigation is often related to the prisoner’s dilemma, a game with one Nash equilibrium. However, the authors perceive investment for mitigation and adaptation as a coordination problem of selecting among multiple equilibria. To illustrate this, we model a non-cooperative coordination game, related to the stag hunt, with a brown equilibrium with lower payoffs that can be achieved single-handedly and a green equilibrium with higher payoffs that requires coordination.

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Mobilising Private Finance for Coastal Adaptation

The role of private finance in meeting adaptation infrastructure investment needs has been widely emphasised in climate policy debates. This new paper Mobilising private finance for coastal adaptation: a literature review in WIREs Climate Change reviews the scientific literature on the issue. The paper thus provides a perspective from the current literature on the questions of what promotes private investment in coastal adaptation and how can public actors’ interest in adaptation be aligned with private investor interests. Read more

The Role of Sustainable Investment in Climate Policy

Reaching the Sustainable Development Goals requires a fundamental socio-economic
transformation accompanied by substantial investment in low-carbon infrastructure. Such a sustainability
transition represents a non-marginal change, driven by behavioral factors and systemic interactions.
However, typical economic models used to assess a sustainability transition focus on marginal changes
around a local optimum, which—by construction—lead to negative effects. Thus, these models do
not allow evaluating a sustainability transition that might have substantial positive effects. This paper
examines which mechanisms need to be included in a standard computable general equilibrium
model to overcome these limitations and to give a more comprehensive view of the effects of climate
change mitigation.

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A climate stress-test of the financial system

An article, published in the journal “Nature Climate Change” on March 27th 2017. The authors, Stefano Battiston, Antoine Mandel, Irene Monasterolo, Franziska Schütze and Gabriele Visentin, have developed a “climate stress-test” of the financial system. The analysis looks beyond the fossil fuel and utility sector, by including energy-intensive sectors as well as indirect effects, and it differentiates between different types of investor.

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Adaptation requires overcoming social conflicts

A Perspective article, published by the Global Climate Forum in the journal Nature Climate Change, highlights that overcoming social conflicts associated to shared resources will be key in adapting to the impacts of climate change. The article shows that decades of research on the commons, resources belonging to or affecting entire communities and most well-known through the work of Nobel Prize winning economist Elinor Ostrom, has accumulated promising ways forward for societies to overcome such conflicts. Read more

Investment-oriented climate policy: An opportunity for Europe

GCF Report

This study shows that an investment-oriented climate policy based on credible climate goals can overcome the increasingly threatening stagnation of the European economy. Since other strategies to tackle the crisis are noticeably losing their plausibility, a constructive debate on this issue is urgently needed. Read more

The systemic risk of a late and sudden transition

New working paper in ESRB report

Is the international financial system at risk, if policy and markets react too late and too abruptly to climate change? A report, published yesterday by the European Systemic Risk Board (ESRB) “Too late, too sudden: Transition to a low-carbon economy and systemic risk” tries to find answers to this question.

Earlier analyses of the British Central Bank and the G20 Financial Stability Board have already raised this issue. In parallel, the “divestment” movement, which calls for the withdrawal of public and private funds from coal, oil and gas companies has further gained momentum worldwide. Read more

The Way Forward in International Climate Policy: Key Issues and New Ideas 2014

The Climate Strategies – CDKN publication with the chapter of Carlo C. Jaeger is now published.

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Managing coasts under threat from climate change and sea-level rise

Coastal regions under threat from climate change and sea-level rise need to tackle the more immediate threats of human-led and other non-climatic changes, according to a team of international scientists.

The team of 27 scientists from five continents, led by Dr Sally Brown at the University of Southampton, reviewed 24 years of Intergovernmental Panel on Climate Change (IPCC) assessments (the fifth and latest set being published in 2013 and 2014).They focused on climate change and sea-level rise impacts in the coastal zone, and examined ways of how to better manage and cope with climate change. Read more