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Insurer green finance under regulatory cap-and-trade mechanism associated with green/polluting production during a war

The cap-and-trade mechanism affects firms’ production and operation decisions and carbon emissions, making them move towards environmental sustainability. This article develops a contingent claims model to examine the impact of the regulatory cap-and-trade mechanism on the green finance strategy of...

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Detalles Bibliográficos
Autores principales: Huang, Fu-Wei, Lin, Jyh-Jiuan
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Public Library of Science 2023
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10019747/
https://www.ncbi.nlm.nih.gov/pubmed/36928452
http://dx.doi.org/10.1371/journal.pone.0282901
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author Huang, Fu-Wei
Lin, Jyh-Jiuan
author_facet Huang, Fu-Wei
Lin, Jyh-Jiuan
author_sort Huang, Fu-Wei
collection PubMed
description The cap-and-trade mechanism affects firms’ production and operation decisions and carbon emissions, making them move towards environmental sustainability. This article develops a contingent claims model to examine the impact of the regulatory cap-and-trade mechanism on the green finance strategy of an insurer during a war. Participating in the cap-and-trade scheme of the insurer that funds the borrowing firms also implicitly affects firm production and carbon emissions. The results show that increasing the green loans decreases the interest margin of the insurer but helps policyholder protection. The insurer is reluctant to provide green loans for the green borrowing firm and thus retards sustainable development. A stringent regulatory cap of the cap-and-trade mechanism raises the insurer’s interest margin but hurts policyholder protection. From the perspective of the insurer’s profit, regulatory cap efficiently derives insurer lending toward sustainability through borrowing-firm cleaner production. An increased war impacting the polluting borrowing firm increases the insurer’s interest margin but harms policyholder protection, affecting insurance stability adversely. This research enriches related literature and knowledge concerning insurer green finance practices indirectly associated with cleaner production. The research also highlights the significance of the regulatory cap-and-trade mechanism that reflects cleaner production in affecting insurer performance during a war.
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spelling pubmed-100197472023-03-17 Insurer green finance under regulatory cap-and-trade mechanism associated with green/polluting production during a war Huang, Fu-Wei Lin, Jyh-Jiuan PLoS One Research Article The cap-and-trade mechanism affects firms’ production and operation decisions and carbon emissions, making them move towards environmental sustainability. This article develops a contingent claims model to examine the impact of the regulatory cap-and-trade mechanism on the green finance strategy of an insurer during a war. Participating in the cap-and-trade scheme of the insurer that funds the borrowing firms also implicitly affects firm production and carbon emissions. The results show that increasing the green loans decreases the interest margin of the insurer but helps policyholder protection. The insurer is reluctant to provide green loans for the green borrowing firm and thus retards sustainable development. A stringent regulatory cap of the cap-and-trade mechanism raises the insurer’s interest margin but hurts policyholder protection. From the perspective of the insurer’s profit, regulatory cap efficiently derives insurer lending toward sustainability through borrowing-firm cleaner production. An increased war impacting the polluting borrowing firm increases the insurer’s interest margin but harms policyholder protection, affecting insurance stability adversely. This research enriches related literature and knowledge concerning insurer green finance practices indirectly associated with cleaner production. The research also highlights the significance of the regulatory cap-and-trade mechanism that reflects cleaner production in affecting insurer performance during a war. Public Library of Science 2023-03-16 /pmc/articles/PMC10019747/ /pubmed/36928452 http://dx.doi.org/10.1371/journal.pone.0282901 Text en © 2023 Huang, Lin https://creativecommons.org/licenses/by/4.0/This is an open access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/) , which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
spellingShingle Research Article
Huang, Fu-Wei
Lin, Jyh-Jiuan
Insurer green finance under regulatory cap-and-trade mechanism associated with green/polluting production during a war
title Insurer green finance under regulatory cap-and-trade mechanism associated with green/polluting production during a war
title_full Insurer green finance under regulatory cap-and-trade mechanism associated with green/polluting production during a war
title_fullStr Insurer green finance under regulatory cap-and-trade mechanism associated with green/polluting production during a war
title_full_unstemmed Insurer green finance under regulatory cap-and-trade mechanism associated with green/polluting production during a war
title_short Insurer green finance under regulatory cap-and-trade mechanism associated with green/polluting production during a war
title_sort insurer green finance under regulatory cap-and-trade mechanism associated with green/polluting production during a war
topic Research Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10019747/
https://www.ncbi.nlm.nih.gov/pubmed/36928452
http://dx.doi.org/10.1371/journal.pone.0282901
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