TY - JOUR

T1 - Exploring the interdependence of climate, finance, energy, and geopolitics

T2 - A conceptual framework for systemic risks amidst multiple crises

AU - Hoffart, Franziska M.

AU - D'Orazio, Paola

AU - Holz, Franziska

AU - Kemfert, Claudia

N1 - Funding Information: The authors thank the participants of the 2022 Conference on Applied Energy (ICAE) and two anonymous reviewers for their valuable feedback and suggestions. Paola D'Orazio and Franziska M. Hoffart acknowledge the pivotal role played by Ruhr-University Bochum in providing the necessary resources that facilitated this research during its first steps. The usual disclaimer applies. Publisher Copyright: © 2024 The Authors

PY - 2024/5/1

Y1 - 2024/5/1

N2 - Navigating the transition toward a zero-emission and just future amidst multiple crises requires a nuanced understanding of potential hindrances to investments and energy transitions. As current approaches hardly consider the big picture of interacting crises, this study offers a framework to analyze the dynamics and risk channels between 1) the climate crisis, 2) financial (in)stability, 3) the geopolitical energy crisis, and 4) the energy transitions. Our framework reveals that the dynamics depends on the specific emergency policy. Hence, we apply the framework to a German Case study. Our findings reveal that fossil energy security policies and insufficient macroprudential policies can threaten the energy transition and financial stability exacerbating negative feedback loops. The discussion highlights that short-term emergency policies outweighing long-term climate goals fail to secure financial stability, reduce transition risks, or accelerate the energy transition. In conclusion, crises can catalyse the transition if short-term emergency policies are harmonized with long-term climate goals advocating for a coherent policy framework.

AB - Navigating the transition toward a zero-emission and just future amidst multiple crises requires a nuanced understanding of potential hindrances to investments and energy transitions. As current approaches hardly consider the big picture of interacting crises, this study offers a framework to analyze the dynamics and risk channels between 1) the climate crisis, 2) financial (in)stability, 3) the geopolitical energy crisis, and 4) the energy transitions. Our framework reveals that the dynamics depends on the specific emergency policy. Hence, we apply the framework to a German Case study. Our findings reveal that fossil energy security policies and insufficient macroprudential policies can threaten the energy transition and financial stability exacerbating negative feedback loops. The discussion highlights that short-term emergency policies outweighing long-term climate goals fail to secure financial stability, reduce transition risks, or accelerate the energy transition. In conclusion, crises can catalyse the transition if short-term emergency policies are harmonized with long-term climate goals advocating for a coherent policy framework.

KW - Climate policy

KW - Climate-related risks

KW - Compound risks

KW - Energy transition

KW - Financial stability

KW - Geopolitical risk

KW - Environmental Governance

KW - Sustainability sciences, Management & Economics

UR - http://www.scopus.com/inward/record.url?scp=85186540831&partnerID=8YFLogxK

U2 - 10.1016/j.apenergy.2024.122885

DO - 10.1016/j.apenergy.2024.122885

M3 - Journal articles

AN - SCOPUS:85186540831

VL - 361

JO - Applied Energy

JF - Applied Energy

SN - 0306-2619

M1 - 122885

ER -