Financial System

To make all the changes possible it is eminent our financial infrastructure is up-to-date. E.g. what limitations are there regarding funding and investment? Or - as important - what are the investment strategies regarding climate change? And how does the insurance industry valuate the changes around and ahead?

As a first step I have generated a list of the most relevant go-to options we have. For now I will strictly focus on The Netherlands. 

 

Together with experts in the field I am going to touch on the subjects below. It is an ongoing framework. You will find all the updates below specified for each specific industry. 

01. Carbon Tax

Price On Carbon.org: 'Like it sounds, a carbon tax is a price on carbon emissions set by the government.  It can start low and ramp up with time.  With a carbon tax, emissions would be a cost to a business, and those business would attempt to minimize those costs, thereby causing a decline in emissions coincident with that cost reduction.  Like allowances, or free permits, in cap and trade, tax breaks could give advantages to some businesses.  To allow the market to truly pick winners and losers, such advantages should be avoided.'

02. European Union Emissions Trading 

Wikipedia: 'European Union Emissions Trading Scheme, was the first large greenhouse gas emissions trading scheme in the world, and remains the biggest. It was launched in 2005 to fight Global warming and is a major pillar of EU climate policy. As of 2013, the EU ETS covers more than 11,000 factories, power stations, and other installations with a net heat excess of 20 MW in 31 countries - all 28 EU member states plus Iceland, Norway, and Liechtenstein. In 2008, the installations regulated by the EU ETS were collectively responsible for close to half of the EU's anthropogenic emissions of CO2 and 40% of its total greenhouse gas emissions. By 2020 the EU hopes to cut greenhouse gas emissions by 20% compared with 1990 and to increase energy efficiency by 20%.'

03. Public Spending

Government spending plays a very big - if not crucial - role in the status quo. Key factors they decide on as market makers include:

 1. Taxation - who will have to pay for what?

 2. Subsidizing - who will get extra help to achieve their goals?

 

04. Commercial Banking System

Commercial banks have a mandate to create money (by lending). It makes a lot of difference what kind of businesses, ngo's and others they favour in this process. 

05. Insurance Industry

The Insurance Industry already acknowledges the risk of climate change. They are redefining their policies every day. The main question on the table of course being in what way they have to weigh all the risks regarding a changing world because of climate change.

06. Investment | Divestment Policies

Climate Change has reached all boardrooms around the world. Big investors are forced to come up with contemporary solutions for their investment portfolios. This means to decide what longterm investments to opt for, and - consequently - what not (or no longer) to support. One of the main sectors to undergo these changes are wind, solar (investment) and the coal industry (divestment).