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Climate change will be humanity’s defining problem for the XXIst century, and yet the speed of global warming can only be contrasted with the leisurely pace at which proposals grind their way through the political process, while carbon emissions have not decreased but increased since 2006 onwards. The European Commission’s “Action Plan on Financing Sustainable Growth” (EU, 2018) has already acknowledged that the financial sector has a crucial role to play in the transition to a “green economy,” while Central banks and supervisors created in 2017 the Network for Greening the Financial System (NGFS) (2019) to manage risks related to climate and mobilize capital for green investments. And yet, the main efforts are focused on benchmarks, and a “green” taxonomy of instruments, the most important of which (green bonds) represent less than 1% of total bonds outstanding worldwide. How is this possible, and, more important, how can it be improved? This is what this course is about. In this course you will learn to identify how to achieve a global carbon emissions reduction by harnessing the power of financial markets, based on an interdisciplinary approach. Unlike past approaches to “financial stability”, where policymakers were accused of “saving the banks (and often the bankers) to save the economy” we propose to “enlist the banks and companies to save the planet.”

CSI participants: Antonio Cabrales, Natalia Fabra, David Ramos, Anxo Sánchez