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Balancing equity and policyholder protection: Assessing insurer's interests in green lending under cap-and-trade regulations.
- Source :
-
PLoS ONE . 11/06/2023, Vol. 18 Issue 11, p1-20. 20p. - Publication Year :
- 2023
-
Abstract
- This paper presents a contingent claim model designed to assess an insurer's equity within the framework of carbon trading regulations imposed on borrowing firms while also considering the integration of green lending. The development of this model is particularly relevant for regions with established carbon trading markets, with a specific focus on the post-period following the 2015 Paris Agreement concerning climate change. We focus on shareholders and policyholders to optimize equity and ensure maximum protection. Strict caps in cap-and-trade harm interest margins, reducing guaranteed rates for equity maximization and compromising policyholder protection. Government intervention through sustainable production carbon trading hinders win-win outcomes. Green subsidies can improve insurer margins, but achieving win-win solutions remains challenging. A collective approach is needed to share sustainable production and finance benefits among diverse economic sectors. [ABSTRACT FROM AUTHOR]
- Subjects :
- *LOANS
*TRADE regulation
*CARBON offsetting
*SUSTAINABILITY
*POLICYHOLDERS
Subjects
Details
- Language :
- English
- ISSN :
- 19326203
- Volume :
- 18
- Issue :
- 11
- Database :
- Academic Search Index
- Journal :
- PLoS ONE
- Publication Type :
- Academic Journal
- Accession number :
- 173452149
- Full Text :
- https://doi.org/10.1371/journal.pone.0293975