Study fuels doubt over benefits of climate risk-weights

Research finds both green supporting factor and carbon penalising factor have drawbacks

Climate risk-weights are unlikely to push people to buy an electric car

Cutting bank capital requirements for green assets may not provide enough financial incentive to change consumer behaviour, a Paris-based think-tank has found, in a study published today.

“The impact is quite weak, especially for renovations and electric cars,” says Julie Evain, a research fellow at the Institute for Climate Economics (I4CE) and one of the study’s authors.

The study also warns that setting risk weights to penalise dirty assets could hamper the transition to net-zero carbon