(Open Access) Recent research finds severe climate damages justify aggressive carbon pricing which actually boosts growth. Yet another recent research paper finds that even an efficient carbon price leaves little room for a fair global carbon budget that also allows developing countries to grow. Climate policy may help aggregate growth, but equity remains unsolved.

Two new papers look at why climate policy underperforms. Voters back inefficient regulations because they misread how carbon taxes work while a financial stake in energy stocks, green or brown, is more effective at building climate support than any messaging campaign. The barriers are not values. They are knowledge and engagement.

Two new working papers, one drawing on Dutch financial media, the other on four decades of U.S. newspaper coverage, find that uncertainty about the future course of climate policy acts as a supply shock, depressing investment, output, and innovation while raising prices.

New evidence shows that green bonds are traded in higher aggregate volumes, driven by more frequent trading than comparable conventional bonds  suggesting secondary market activity is more robust than commonly assumed. However, in the sovereign segment, the yield advantage of green bonds remains economically modest as issuers make no binding legal obligations on the use of proceeds.

Financial markets can theoretically price carbon like a tax through higher returns for polluters, but two structural barriers block this: investor indifference to climate allows capital to keep flowing to dirty firms, while underwriting dealers reduce the carbon premium by 85% when firms actually issue bonds.

Recent empirical research reveals that climate change’s economic impacts across  six grand challenges, namely economic output, health, conflict, food security, disasters, and migration, are far more substantial and unequally distributed than previously understood, with U.S. evidence showing extreme weather and cascading indirect effects driving the largest household costs.

Two papers demonstrate that the green transition is fundamentally driven by how firms perceive regulatory risk. Clear pro-transition signals lower this premium and unlock investment, while policy uncertainty raises it and freezes capital, particularly when firms fear potential policy rollback.

Recent research provides compelling evidence that green finance and corporate commitments deliver genuine emissions reductions, with large emitters reducing carbon intensity by up to 50% after green debt issuance and strategically committing to net-zero when incentives align.

Severe weather events reduce regional GDP primarily through employment losses and worker outmigration. Labor market flexibility and anticipatory migration are essential adaptation mechanisms, yet regional disparities in resilience mean that affected workers and capital owners face highly unequal welfare losses from increasingly intense extreme weather events.

New research on the macroeconomic effects of climate policies in the euro area, showing how carbon and capital taxes, revenue recycling, and global coordination shape inflation, output, and energy dynamics. Another paper suggests that medium-run disequilibrium during decarbonization requires administrative policy tools beyond conventional monetary measures.