Risk in Decarbonisation Finance
Green bonds are financial assets that have become crucial means for institutions, NGOs and governments to raise funding for green investments.
Project Background
Green Bonds are critical to industrial decarbonisation. Despite being a US$1 trillion global market, their relatively recent emergence means they are understudied in academic literature. There is a major gap in our understanding of the association between a number of interrelated processes.
These include the capital raised to fund green infrastructure projects; the disbursement of funds for such projects; the project selection success and mechanisms; and the environmental impact of these funds on climate mitigation and carbon neutralisation. For industrial decarbonisation to proceed at pace there will need to be an equivalent speed in decarbonisation funding innovation. This will depend on issuers and underwriters understanding the risks associated with this funding, which in turn depend on a complex set of interrelated socioeconomic systems.
Project Leads/ Supervisors
Co-investigators/ PhDs/ RAs
Professor Gareth Peters - UC Santa Barbara
Research Aim
Introduce and measure new variants of risk that will improve innovation in the funding for decarbonisation. Furthermore we aim to:
- Identify resilient structures among the finance networks of decarbonisation
- Identify other risk frameworks, such as environmental or policy risk
- Identify opportunity areas with low levels of risk and latent potential
- Develop practical decision frameworks for funding decarbonisation
- Report on Policy Implications and Strategic Guidance
Methods
- Natural Language Processing
- Network Science
- Econometrics
Funding
UKRI - via IDRIC