| Title: |
The challenge of phasing-out fossil fuel finance in the banking sector. |
| Authors: |
Rickman, J., Falkenberg, M., Kothari, S., Larosa, F., Grubb, M., Ameli, N. |
| Source: |
Nature Communications; 9/10/2024, Vol. 15 Issue 1, p1-12, 12p |
| Subject Terms: |
BANK loans, BANKING industry, LOANS, BOND market, DEBT |
| Abstract: |
A timely and well-managed phase-out of bank lending to the fossil fuel sector is critical if Paris climate targets are to remain within reach. Using a systems lens to explore over $7 trillion of syndicated fossil fuel debt, we show that syndicated debt markets are resilient to uncoordinated phase-out scenarios without regulatory limits on banks' fossil fuel lending. However, with regulation in place, a tipping point emerges as banks sequentially exit the sector and phase-out becomes efficient. The timing of this tipping point depends critically on the stringency of regulatory rules. It is reached sooner in scenarios where systemically important banks lead the phase-out and is delayed without regional coordination, particularly between US, Canadian and Japanese banks. Rickman and colleagues explore scenarios for phasing out lending to fossil fuel firms. They analyse over $7 trillion of fossil fuel debt and show that financial regulation and international co-operation will be critical for a timely and just phase-out of fossil fuel finance. [ABSTRACT FROM AUTHOR] |
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| Database: |
Complementary Index |
