Phasing out fossil fuel finance is crucial for meeting the Paris Agreement goals. This study analyzes over \$7 trillion in syndicated fossil fuel debt, revealing that uncoordinated phase-out attempts are ineffective. However, with regulation, a tipping point is reached where banks sequentially exit the sector, leading to efficient phase-out. The timing of this tipping point depends on regulatory stringency, with systemically important banks leading the way and regional coordination being vital.
Publisher
Nature Communications
Published On
Sep 10, 2024
Authors
J. Rickman, M. Falkenberg, S. Kothari, F. Larosa, M. Grubb, N. Ameli
Tags
fossil fuel finance
regulation
phase-out
Paris Agreement
banking sector
tipping point
coordinated efforts
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