How central banks manage climate and energy transition risks
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Decarbonizing urban residential communities with green hydrogen systems
Community green hydrogen systems, typically consisting of rooftop photovoltaic panels paired with hybrid hydrogen-battery storage, offer urban environments with improved access to clean, on-site energy. However, economically viable pathways for deploying hydrogen storage within urban communities remain unclear. Here we develop a bottom-up energy model linking climate, human behavior and community characteristics to assess the impacts of pathways for deploying community green hydrogen systems in North America from 2030 to 2050. We show that for the same community conditions, the cost difference between the best and worst pathways can be as high as 60%. In particular, the household centralized option emerges as the preferred pathway for most communities. Furthermore, enhancing energy storage demands within these deployment pathways can reduce system design costs up to fourfold. To achieve cost-effective urban decarbonization, the study underscores the critical role of selecting the right deployment pathway and prioritizing the integration of increased energy storage in pathway designs.
The risk effects of corporate digitalization: exacerbate or mitigate?
This study elaborates on the risk effects of corporate digital transformation (CDT). Using the ratio of added value of digital assets to total intangible assets as a measure of CDT, this study overall reveals an inverse relationship between CDT and revenue volatility, even after employing a range of technical techniques to address potential endogeneity. Heterogeneity analysis highlights that the firms with small size, high capital intensity, and high agency costs benefit more from CDT. It also reveals that advancing information infrastructure, intellectual property protection, and digital taxation enhances the effectiveness of CDT. Mechanism analysis uncovers that CDT not only enhances financial advantages such as bolstering core business and mitigating non-business risks but also fosters non-financial advantages like improving corporate governance and ESG performance. Further inquiries into the side effects of CDT and the dynamics of revenue volatility indicate that CDT might compromise cash flow availability. Excessive digital investments exacerbate operating risks. Importantly, the reduction in operating risk associated with CDT does not sacrifice the potential for enhanced company performance; rather, it appears to augment the value of real options.
Event triggers and opinion leaders shape climate change discourse on Weibo
Understanding how real-world events and opinion leaders shape climate change discussions is vital for improving communication and policy formulation to meet global carbon mitigation goals. This study analyzed 5.3 million original posts from Weibo (2012–2022), China’s largest social media platform, to examine climate change discourse. We found five event types triggering 48 discussion peaks, including online activities, international conferences, extreme weather, domestic policies, and international news. Posts generally conveyed positive attitudes, though sentiment decreased during haze pollution and the COVID-19 pandemic. Network analysis revealed seven opinion leader groups with distinct strategies: official media and institutions emphasized political will, global initiatives, and socio-economic implications, while universities and grassroots individuals focused on scientific reality and personal actions. Celebrities and unofficial accounts often highlighted geopolitical topics, especially China-US relations. We suggest reducing fragmented echo chambers and fostering personal connections through digital media platforms to enhance public awareness.
Climate change threatens crop diversity at low latitudes
Climate change alters the climatic suitability of croplands, likely shifting the spatial distribution and diversity of global food crop production. Analyses of future potential food crop diversity have been limited to a small number of crops. Here we project geographical shifts in the climatic niches of 30 major food crops under 1.5–4 °C global warming and assess their impact on current crop production and potential food crop diversity across global croplands. We found that in low-latitude regions, 10–31% of current production would shift outside the climatic niche even under 2 °C global warming, increasing to 20–48% under 3 °C warming. Concurrently, potential food crop diversity would decline on 52% (+2 °C) and 56% (+3 °C) of global cropland. However, potential diversity would increase in mid to high latitudes, offering opportunities for climate change adaptation. These results highlight substantial latitudinal differences in the adaptation potential and vulnerability of the global food system under global warming.
Bank lending and environmental quality in Gulf Cooperation Council countries
To achieve economies with net-zero carbon emissions, it is essential to develop a robust green financial intermediary channel. This study seeks empirical evidence on how domestic bank lending to sovereign and private sectors in Gulf Cooperation Council (GCC) countries impacts carbon dioxide and greenhouse gas emissions. We employ PMG-ARDL model to panel data comprising six countries in GCC over twenty years for carbon dioxide emissions and nineteen years for greenhouse gas emissions. Our findings reveal a long-term positive impact of both bank lending variables on carbon dioxide and greenhouse gas emissions. In addition, lending to the government shows a negative short-term effect on greenhouse gas emissions. The cross-country results demonstrate the presence of a long-run effect of explanatory variables on both types of emissions, except for greenhouse gas in Saudi Arabia. The sort-term impact of the explanatory variables on carbon dioxide and greenhouse gas emissions is quite diverse. Not only do these effects differ across countries, but some variables have opposing effects on the two types of emissions within a single country. The findings of this study present a new perspective for GCC economies: neglecting total greenhouse gas emissions and concentrating solely on carbon dioxide emissions means missing critical information for devising effective strategies to combat threats of environmental degradation and achieve net-zero goals.
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