The role of emission disclosure for the low-carbon transition

Arbeitspapier

We show the importance of emission disclosure for climate policies in a DSGE model for the euro area. A low-carbon energy and a fossil energy sector contribute to production and are financed by balance-sheet constrained intermediaries. The underestimation of emissions from fossil energy firms (imperfect disclosure) provides them with too much funding. While improving disclosure in isolation has limited effects, it proves most beneficial in connection with higher carbon taxes: Improving disclosure by 20 percentage points reduces GDP costs of a carbon tax by 13%. For a carbon tax increase of 50 euro/ton CO2, this implies an average GDP benefit of 47 bn euro over six years.

Object Details

• ISBN: 978-3-95729-968-0
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Deutsche Bundesbank Discussion Paper ; No. 33/2023

Classification and Topics

• Classification: Wirtschaft ; Asymmetric and Private Information; Mechanism Design ; General Aggregative Models: Forecasting and Simulation: Models and Applications ; Portfolio Choice; Investment Decisions ; Information and Market Efficiency; Event Studies; Insider Trading ; General Financial Markets: Government Policy and Regulation ; Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies ; Energy and the Macroeconomy ; Environmental Economics: Government Policy
• Subject: emission disclosure ; climate-related disclosure ; climate policy ; carbon taxation ; E-DSGE ; financial frictions

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Frankovic, Ivan ; Kolb, Benedikt
• Event: Veröffentlichung
• (who): Deutsche Bundesbank
• (where): Frankfurt a. M.
• (when): 2023

Further information

• Handle: http://hdl.handle.net/10419/282981
• URN: urn:nbn:de:101:1-2023121910533376245340
• Last update: 10.03.2025, 11:43 AM CET