Chapter 4

Question 1

International Climate Policy

Answer 1

Binding and nonbinding multinational agreements that primarily focus on reducing greenhouse gas emissions.

Question 2

UNFCC & what is it

Answer 2

United Nations Framework Convention on Climate Change - 1st global agreement on Climate established

Question 3

Kyoto protocol + when was established

Answer 3

1997, legally binding treaty, where high-income countries agreed to reduce emissions by 5% from 1990 by 2008 - 2012

Question 4

Paris Agreement, when was it taken, what are the target temperatures

Answer 4

Taken in 2015, agree on 1.5-2 С reduction, relies on peer pressure

Question 5

2 types of carbon pricing policies

Answer 5

Carbon tax & emissions-trading schemes (cap and trade schemes)

Question 6

DICE model what it means

Answer 6

Dynamic Integragted Climate-Economy model by Nordhaus

Question 7

What is the international consensus # of degrees С of warming?

Answer 7

2 degrees С

Question 8

Tragedy of commons in the Climate Change problem

Answer 8

Good climate is a common good. If a country cuts down its emissions now - it suffers full economic losses short term, but only gets a fraction of the benefit of a good climate, and in the long term -> discouragement to do it, rather want to be a free rider

Question 9

What affects CC more - total stock of CO2, or the annual flow?

Answer 9

Total stock

Question 10

WMO

Answer 10

World Meteorological Organization

Question 11

What is Kyoto protocol about?

Answer 11

The Kyoto Protocol, which took the form of a legally binding treaty, required high-income “Annex 1” countries to attain 5% emissions reductions compared to 1990 levels by 2008–2012, with several mechanisms built in that attempted to promote flexibility and technology transfer between countries.

Question 12

3 mechanisms of Kyoto protocol

Answer 12

1. Emission trading between Annex 1 countries
2. Technology transfer between the Annex 1 countries
3. Clean development mechanism - e.g. if Annex 1 country conducts an emission reduction project in a non-annex 1 country -> it gets credit

Question 13

Goal of Paris agreement

Answer 13

Keep global temperature rise “well below 2C above preiundustrial levels”, “pursue efforts to limit rise to 1.5 С”

Question 14

NDC

Answer 14

Nationally Determined Contribution - national plans to reduce GHG emissions

Question 15

Global Stocktake

Answer 15

Institution by Paris agreement - periodic assessments of collective progress towards agreed climate goals

Question 16

Difference btw Kyoto and Paris Agreement, that made Paris more successful

Answer 16

1. Paris relies on inclusion and peer pressure, Kyoto - on legal binding, but it’s hard to bind the whole country.
2. Paris recognized that many stakeholders can help to contribute to С goals (cities, regions, businesses, financial institutions, etc.)

Question 17

2 types of carbon pricing policies

Answer 17

1. Carbon tax (price per ton of CO2 emitted)
2. Emission trading (cap-and-trade)
   - Limits on industries / sectors

Question 18

3 types of carbon tax

Answer 18

1. Upstream (production and import of fossils)
2. Midstream (applied at processing / distribution stage)
3. Downstream (applied to consumers)

Question 19

Carbon leakage

Answer 19

When carbon intense companies relocate to place with weaker carbon policies

Question 20

RPS (Renewable Portfolio Standards)

Answer 20

Policy for commercial power producers - certain proportion of supply must come from renewable energy sources, wind, solar

Question 21

def subnational climate policies

Answer 21

implemented in states, regions, cities

Question 22

WRI

Answer 22

World Resource Institute

Question 23

WBCSD

Answer 23

World Business Council for Sustainable Development

Question 24

GHG protocol

Answer 24

Most widely used GHG emissions accounting standard

Question 25

Direct emissions Indirect emissions

Answer 25

Emissions from sources controlled by the reporting company Indirect - emissions that are result of activities of reporting company, but are not controlled by it

Question 26

3 emission scopes

Answer 26

Scope 1 emissions are direct emissions from owned or controlled sources. Scope 2 emissions are indirect emissions from the generation of purchased energy. Scope 3 emissions are all indirect emissions (not included in Scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions.

Question 27

Project finance

Answer 27

Loans used to build infrastructure (e.g. financing highways, airports, gold mines, etc.)

Question 28

International Financial Institutions

Answer 28

Banks that are established and managed by two or more countries

Question 29

Multilateral Development Banks

Answer 29

Multinational institutions that support financial growth in developing countries.

Question 30

DFI (Development Financial Institutions)

Answer 30

Institutions that finance projects in developing countries

Question 31

Double bottom line mission

Answer 31

Institution with this mission is designed to be self-sufficient, but with a mandate to support socioeconomic development, NOT to maximize profits

Question 32

SLB (Sovereign sustainability-Linked Bond)

Answer 32

Bond, linked to sus. targets of the issuing government. Interest rate depends on whether gov-t makes progress to these goals. Failure -> higher IR

Question 33

Green taxonomy def

Answer 33

Lists made by policymakers and regulators of economic activities considered "green"

Question 34

3 conditions for the economic activity to be considered sustainable + 6 types

Answer 34

(a) make a substantive contribution to one of six environmental objectives, (b) do no significant harm to the other five (c) meet minimum safeguards (e.g., the OECD Guidelines on Multinational Enterprises and the UN Guiding Principles on Business and Human Rights). Climate change mitigation Climate change adaptation Sustainable use and protection of water and marine resources Transition to a circular economy Pollution prevention and control Protection and restoration of biodiversity and ecosystems

Question 35

brown, transition, and green activities

Answer 35

brown - contributes to CC green - facilitate transition to a low-carbon economy transition activity - has potential to become greener by embracing low-carbon technologies / practices

Question 36

diff btw green and transition taxonomy

Answer 36

green - focuses only on green activities transition taxonomy - focus on all activities, based on their contrib to transition to sust economy

Question 37

NGFS (Network for Greening the Financial System)

Answer 37

Initiative joining central banks and regulators to work on climate integration & spread best practices

Question 38

micro- and macroprudential supervision

Answer 38

micro - examine specific fin institution macro - examine stability of the broader financial system

Question 39

Stress test

Answer 39

Test modelling the reaction of a fin inst or the whole fin sys to a hypothetical shock

Question 40

FCA

Answer 40

Financial Conduct Authority - UK financial regulator for conduct & fin consumer protection

Question 41

Greenwashing

Answer 41

Marketing portraying products as producing positive env outcome, while it's not the case

Question 42

TCFD

Answer 42

Task Force on Climate related Financial Disclosures

Question 43

CDP

Answer 43

Carbon disclosure project - global environmental disclosure platform

Question 44

Diff btw climate R and environmental R

Answer 44

Climate R is a subset of env Risk. Climate R - physical risk, transition risk. Environmental risk - climate R + risk from pollution, waste, biodiversity loss, resource depletion, habitat destruction

Question 45

TNFD

Answer 45

Task force on nature-related fin disclosures (June 2021)

Question 46

Climate action 100+

Answer 46

Private sector, investor-led initiative to pressure the world's most polluting firms to do more on CC

Question 47

.