Original scientific paper
https://doi.org/10.1080/1331677X.2022.2081864
Sovereign debt management in the face of climate liabilities: perspective of European Union member states
Iustina Alina Boitan
Kamilla Marchewka-Bartkowiak
Abstract
Climate change impact on sovereign debt management has
become an issue of great concern. The aim of this paper is to analyse
the changes in the traditional approach of sovereign debt
managers in the face of the pursued climate policy and different
scenarios of climate liabilities for 2050. We follow a novel threefold
research approach: 1) assessment of the estimated level of current
climate liabilities based on the Fiscal Risk Matrix; 2) performing
forward-looking climate debt projections over the timeframe 2025-
2050 for the EU countries; 3) conducting case study research on
EU countries, to identify the sovereign climate debt management
activities undertaken so far and to define a series of good-practice
guidelines. Findings indicate a growing role of the climate financial
mechanisms in sovereign debt management. In particular, our
climate scenario approach reveals those scenarios in which a country’s
fiscal position indicators are more vulnerable from the standpoint
of rising public expenditure due to the country’s inability to
manage CO2 gas emissions. Each country is responsible for its climate
pathway by 2050 and this will be mainly determined by the
timeliness, efficacy and appropriateness of the public policies and
measures implemented to mitigate climate change.
Keywords
Climate change; sovereign debt management; climate debt (liabilities); fiscal risk
Hrčak ID:
303778
URI
Publication date:
31.3.2023.
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