The Future of Environmental Finance

Jean-Baptiste Vaujour is a Professor of Practice at emlyon business school where he teaches about consulting and green finance. He is an energy economist and a registered expert at the EU Commission and for the World Energy Council. He has recently published a book on the decarbonisation of the economy.   Source: https://tradingeconomics.com/commodity/carbon Carbon pricing has become a cornerstone of environmental policies around the world. According to the latest World Bank tally , 110 carbon pricing instruments have been implemented, covering 53 countries, either through taxes or carbon markets. According to theory, carbon prices provide a clear price signal to the actors of the economy and informs them of the environmental cost of their pollution. They then have a clear incentive to reduce their emissions if they wish to reduce the associated bottom-line impact. The central question in this framework is to determine what the optimal carbon price should be. Pricing a commod...

  Jean-Baptiste Vaujour is a Professor of Practice at emlyon business school where he teaches about consulting and green finance. He is an energy economist and a registered expert at the EU Commission and for the World Energy Council. He has recently published a book on the decarbonisation of the economy.   In this article, we explore the stakes around the emergence of a common language when stakeholders discuss green finance.   Based in economic theory, this requirement has been a constant request from market participants and a major regulatory achievement for the European Commission. Unfortunately, it is also only a prerequisite to actual environmental impact and even so, it already faces challenges and strong headwinds. Economic theory requires transparent information for efficient decisions Most of economic theory rests on the idea that market channel information to stakeholders in a transparent, immediate and free way. Investors can then decide on an efficien...