Abstract This article discusses the links between climate and debt sustainability by focusing on how climate mitigation and adaptation are paid for, and who pays for it. This requires thinking about instruments such as sovereign bonds, carbon credits, conditional official grants and debt relief from both public and private sources. The article discusses the role of green bonds, carbon offsets, grants and debt relief. Among these solutions, no single instrument appears to be right for all countries or at all times. To move forward, we make six proposals and policy recommendations that can jointly address climate change and debt sustainability.

This paper studies the effects of carbon pricing on inflation dynamics. We construct a sample of carbon taxes implemented in Europe and Canada over three decades and estimate the response of inflation and price components to carbon pricing. Our empirical results suggest that carbon taxes did not significantly increase inflation, with dynamic effects estimated around zero in most specifications. Instead we find support for relative price changes, increasing the cost of energy but leaving the price of other goods and services unaffected. This is consistent with previous findings on the limited aggregate economic costs of carbon taxes. Based on the cross-section of taxes in Europe, we provide suggestive evidence that the response of inflation was especially muted in countries with revenue-neutral carbon taxes and autonomous central banks that can accommodate potential inflationary pressure associated with carbon pricing.

We investigate whether the market for ICOs in 2017-2018 and 2021 showed signs of contagion from prices of Bitcoin and Ether. During phases of optimism, ICO daily returns display low correlations with those of Bitcoin or Ether. But when the bubble bursts, correlations jump to very high levels, signaling that the ICO market becomes a sideshow of the cryptocurrency dynamics. We demonstrate that this high correlation was not present during the Nasdaq bubble in the 1990s, signaling that the price dynamics of digital tokens seems to be driven by a common factor, much more than in previous bubbles.

Journal Article Environmental protection and sovereign debt restructuring Get access Patrick Bolton, Patrick Bolton Search for other works by this author on: Oxford Academic Google Scholar Lee C Buchheit, Lee C Buchheit Search for other works by this author on: Oxford Academic Google Scholar Beatrice Weder di Mauro, Beatrice Weder di Mauro Search for other works by this author on: Oxford Academic Google Scholar Ugo Panizza, Ugo Panizza Search for other works by this author on: Oxford Academic Google Scholar Mitu Gulati Mitu Gulati Email: mgulati@law.virginia.edu Search for other works by this author on: Oxford Academic Google Scholar Capital Markets Law Journal, Volume 17, Issue 3, July 2022, Pages 307–316, https://doi.org/10.1093/cmlj/kmac011 Published: 03 June 2022 Article history Accepted: 20 May 2022 Published: 03 June 2022

What is the effect of climate policies on inflation and economic activity? Answering this question is critical for central banks trying to achieve price stability. This paper studies the experience from existing Co2 taxes in Canada and Europe, introduced over the last 30 years. Based on two separate empirical approaches, we find that carbon taxes do not have to be inflationary and may even have deflationary effects. In particular, our evidence suggests that the increase in energy prices was more than offset by a fall in the prices of services and other non-tradables. Our results are robust for Europe and Canada, as well as a number of different country groupings. At least in case of British Columbia, a contraction in household incomes and expenditures, in particular among the richer households, could explain the deflationary effect.

This paper presents two types of analysis on the interaction between policies to deal with climate change and monetary policies in the euro area. First, we empirically analyze the historical effects of carbon taxes on inflation in the euro area countries to gauge the impact under the current European monetary regime. Second, we explore two alternative monetary policy rules under a range of simulations in a new European version of the G-Cubed multisector model. We study the economic and inflationary impacts of physical climate change shocks (climate risk) and transitions risks arising from carbon taxation within Europe and globally. We find that under the existing monetary policy framework, the inflationary effects of carbon taxes in Euro area countries have been contained. The only significant increase in the HICP (of about 0.8 index points) is found in the first two years. At the same time, however, the impact on core inflation tended to be negative. Thus, carbon taxes mainly affected relative prices rather than the overall price level, which is in line with previous findings for a broader sample of countries. We also find that producers seem to have absorbed a part of the carbon tax since consumer price inflation was lower than producer price inflation.

It is in the interest of every EU member state that countries in the Union hit by the coronavirus are able to take the necessary measures to control the pandemic and deal with the economic consequences without being constrained, and to do so very quickly. This column proposes a Covid credit line in the European Stability Mechanism, with allocation across member states proportionate to the severity of the public health and economic challenges encountered. While it would involve some coordination and solidarity among member states, the dedicated credit line would reduce risks to economic and financial stability for all while allowing members to sustain their efforts by making their borrowing costs less dependent on individual fiscal situations.

The corona crisis started in China and had great consequences for public health and the economy. In the meantime, high and rapidly growing numbers of cases of infections with SARS-CoV-2 have also been recorded in Japan, Korea, Italy, Germany, Great Britain, France, Spain and above all in the USA. Forecasts of economic growth have been massively revised downwards and governments around the world are struggling to find the right economic policy response. This article describes basic short-term options for the German government to react to the corona shock and briefl y assesses the package of measures “Schutzschirm für Beschäftigte und Unternehmen” presented on 13 March 2020 by the German Finance Minister Olaf Scholz and the German Economics Minister Peter Altmaier.

The global downturn caused by the Covid-19 pandemic has the potential to send more than half the nations around the globe into debt distress in the near future

Europe’s failure to manage a bold, common response would further increase divergence, strengthen anti-European forces and fuel populism.

Beyond its public health dimension, the unfolding coronavirus epidemic also represents a severe economic stress test for Europe that comes from a totally unexpected side. This time, it is primarily a shock to the real economy hitting all European countries more or less equally (time lags will soon become a footnote). The buffers and firewalls put in place after the global financial crisis and the euro crisis have been designed to fight a different sort of crisis, originating in the financial sector or in a particular sovereign. This time is different.

Reconstructing the EU After COVID-19On 21 July 2020, EU leaders announced a ground-breaking and highly anticipated plan, the 'Next Generation EU', to jointly borrow €750 billion to respond to the coronavirus pandemic.The EU's new recovery plan, which will be composed of grants and loans attached to the new Multiannual Financial Framework, is the culmination of what many consider a painfully slow and uncoordinated European response to the COVID-19 crisis and the far-reaching effects it has had on the European economy.While a crisis of this magnitude could threaten the EU's very existence, deepening divides and sewing the seeds of anti-European sentiment, it may conversely also be an opportunity for the EU to address some of the fundamental fl aws that exist in the euro area architecture.The pandemic response is a chance for Europe to reboot by focusing on a number of mechanisms at hand, including state aid, taxation and labour reallocation, among others.The EU should not lose sight of broader societal goals such as climate neutrality and digitisation but rather prioritise them.Ultimately, if handled correctly, the coronavirus pandemic has the potential to bring the EU together like no other event since its foundation.

Die zweite Welle der COVID-19-Pandemie schafft zusatzliche Herausforderungen fur Unternehmen in Sektoren, die von Massnahmen zur Eindammung der Pandemie und/oder von einem starken Nachfrageruckgang betroffen sind. Lohnausfalle werden weiterhin durch Zahlungen fur Kurzarbeit und Erwerbsausfall ausgeglichen. Seit dem Auslaufen der COVID-19-Uberbruckungskredite im Juli fehlt jedoch ein Instrument, um den betroffenen Unternehmen zu helfen, ihre fixen Kapitalkosten zu tragen.