Many financial intermediaries are contributing to reducing greenhouse gas emissions by following environmental sustainability criteria when supplying credit. The paper uses three theoretical models to evaluate the macroeconomic and environmental effects of modifying financing conditions, so as to favour the use of less polluting technologies, for high-emission firms' investments.
According to the three models, intermediaries' portfolio decarbonisation strategies that offer incentives to polluting firms for investing in green technologies are preferable to a generalized exacerbation of financing conditions provided to polluting firms. The latter does not necessarily favour emissions reduction, or it induces it only in the face of a reduction in economic activity.
