Seminar: Finance and Carbon Emissions

NOTE: this seminar takes place on a Wednesday

We study the relation between the structure of financial systems and carbon emissions in a large panel of countries and industries over the period 1990-2013. We find that for given levels of economic and financial development, CO2 emissions per capita are lower in economies that are relatively more equity-funded. Industry-level analysis reveals two distinct channels: stock markets reallocate investment towards less polluting sectors and, second, they push carbon-intensive sectors to develop and implement greener technologies. In line with this second channel, we show that carbon-intensive sectors produce more green patents as stock markets deepen.