the Creative Commons Attribution 4.0 License.
the Creative Commons Attribution 4.0 License.
| 04 Sep 2023
Driving sustainability transitions through financial tipping points
Abstract. Achieving a net-zero carbon economy requires significant structural changes in the financial system, including a substantial shift in investment towards low-carbon assets. Through the alignment of expectations, promotion of herding behavior, utilization of public finance, reduction of capital costs and attainment of low-carbon investment thresholds in developing nations, and implementation of robust financial regulations and policies, the financial system can assume a central role in re-orienting economies onto a net-zero course. Taken together, such mechanisms highlight the positive tipping points that can be triggered within sustainable finance and emphasize the necessity of policy interventions to activate and capitalize on these dynamics. The identification and activation of critical and positive tipping points can lead to the amplification of sustainable investments and foster transformative changes in the practices of the financial sector.
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Notice on discussion status
The requested preprint has a corresponding peer-reviewed final revised paper. You are encouraged to refer to the final revised version.
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Preprint
(498 KB)
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The requested preprint has a corresponding peer-reviewed final revised paper. You are encouraged to refer to the final revised version.
- Preprint
(498 KB) - Metadata XML
- BibTeX
- EndNote
- Final revised paper
Journal article(s) based on this preprint
Interactive discussion
Status: closed
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RC1: 'Comment on egusphere-2023-1750', Charlotte Gardes, 03 Oct 2023
Find attached my comments on this fantastic paper. I would be happy to discuss them with the authors, if needed,
All the best,
Charlotte Gardes-Landolfini (IMF)- AC1: 'Reply on RC1', Francesco Lamperti, 02 Apr 2024
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RC2: 'Comment on egusphere-2023-1750', Anonymous Referee #2, 25 Dec 2023
“Financial tipping points” is an interesting subject in the interdisciplinary research on critical thresholds in the climate system, and also in the fast-evolving field of climate finance. The main focus of this paper is on “positive” tipping points, in particular on how “the financial system can assume a central role in re-orienting economies onto a net-zero course”.
The structure is reasonably clear. After the introduction, there is a listing of concepts on the “potential for tipping points” in finance, followed by a run-through of “empirical and modelling evidence”, and some conclusions. The narratives of the 5-6 potential financial tipping points are summarized well. Readers with a certain understanding of the climate finance “jargon” can certainly learn from that.
It is not easy to assess the scientific contribution of this summary paper. For a literature survey, it would not be critical and wide-ranging enough. It feels more like an introduction to a research agenda, with various references to scholarly work undertaken elsewhere. There is not much time spent on the definition and critical examination of concepts and insights. There are hardly any figures, stats, tables or graphs – quite striking for a finance paper. A few examples are given but it is often difficult to distinguish “positive” and “normative” statements, exemplified by the fact that the word “can”, e.g., is used 44 times.
For my personal taste, a generic approach using the “financial system” is probably too broad a brush. Sustainable finance and impact investing have made considerable progress in recent years, and so has regulation in the field. New facts are being established, although unevenly across sectors, geographies, financial and political institutions. Academic research needs to be careful not to fall too far behind the “factual” curve.
In terms of minor comments:
- Some more definitions could be given for the non-expert readership.
- Careful with generic statements and consistency. For example, is the financial system “neutral” (page 9) or “conservative” (page 3)?
- There is still a diligent job to be done at reconciling references in the text and the reading list.
Citation: https://doi.org/10.5194/egusphere-2023-1750-RC2 - AC2: 'Reply on RC2', Francesco Lamperti, 02 Apr 2024
Interactive discussion
Status: closed
-
RC1: 'Comment on egusphere-2023-1750', Charlotte Gardes, 03 Oct 2023
Find attached my comments on this fantastic paper. I would be happy to discuss them with the authors, if needed,
All the best,
Charlotte Gardes-Landolfini (IMF)- AC1: 'Reply on RC1', Francesco Lamperti, 02 Apr 2024
-
RC2: 'Comment on egusphere-2023-1750', Anonymous Referee #2, 25 Dec 2023
“Financial tipping points” is an interesting subject in the interdisciplinary research on critical thresholds in the climate system, and also in the fast-evolving field of climate finance. The main focus of this paper is on “positive” tipping points, in particular on how “the financial system can assume a central role in re-orienting economies onto a net-zero course”.
The structure is reasonably clear. After the introduction, there is a listing of concepts on the “potential for tipping points” in finance, followed by a run-through of “empirical and modelling evidence”, and some conclusions. The narratives of the 5-6 potential financial tipping points are summarized well. Readers with a certain understanding of the climate finance “jargon” can certainly learn from that.
It is not easy to assess the scientific contribution of this summary paper. For a literature survey, it would not be critical and wide-ranging enough. It feels more like an introduction to a research agenda, with various references to scholarly work undertaken elsewhere. There is not much time spent on the definition and critical examination of concepts and insights. There are hardly any figures, stats, tables or graphs – quite striking for a finance paper. A few examples are given but it is often difficult to distinguish “positive” and “normative” statements, exemplified by the fact that the word “can”, e.g., is used 44 times.
For my personal taste, a generic approach using the “financial system” is probably too broad a brush. Sustainable finance and impact investing have made considerable progress in recent years, and so has regulation in the field. New facts are being established, although unevenly across sectors, geographies, financial and political institutions. Academic research needs to be careful not to fall too far behind the “factual” curve.
In terms of minor comments:
- Some more definitions could be given for the non-expert readership.
- Careful with generic statements and consistency. For example, is the financial system “neutral” (page 9) or “conservative” (page 3)?
- There is still a diligent job to be done at reconciling references in the text and the reading list.
Citation: https://doi.org/10.5194/egusphere-2023-1750-RC2 - AC2: 'Reply on RC2', Francesco Lamperti, 02 Apr 2024
Peer review completion
Journal article(s) based on this preprint
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Cited
1 citations as recorded by crossref.
Nadia Ameli
Hugues Chenet
Max Falkenberg
Sumit Kothari
Jamie Rickman
Francesco Lamperti
The requested preprint has a corresponding peer-reviewed final revised paper. You are encouraged to refer to the final revised version.
- Preprint
(498 KB) - Metadata XML