Information, Markets, and Networks: Essays in Climate Finance

Effective climate policy requires accurate emissions measurement, carbon prices that reflect underlying economic and environmental conditions, and coordination mechanisms that induce firms to internalize emissions generated across production networks. Existing systems fall short on all three dimensions, weakening the link between abatement, reported emissions, investment decisions, and regulatory outcomes. This dissertation studies these limitations through three complementary lenses: carbon markets under financial frictions, the measurement of emissions across global supply chains, and capital allocation in production networks with unpriced externalities. The first chapter analyzes the interaction between emissions regulation, voluntary carbon credit markets, and firm-level borrowing constraints in a dynamic macro-finance framework. Informational wedges arising from heterogeneous credit quality and delayed verification allow firms to strategically understate emissions, distorting investment and weakening carbon-price signals. The chapter proposes a real-time, ledger-based carbon asset system with managed supply, showing that improved emissions verification substantially reduces welfare losses. The second chapter develops a network-consistent methodology to measure Scope-3 and embedded emissions across international supply chains. By combining firm-level data, reconstructed trade quantities, transport emissions, and input–output linkages, the framework produces transparent and replicable emissions estimates for over 50,000 firms worldwide, enabling counterfactual analysis and reliable carbon accounting. The third chapter studies production and investment in networks with unpriced emissions externalities and greenness-dependent financial constraints. It shows that decentralized equilibria are inefficient and proposes a decentralized governance mechanism that internalizes network-wide emissions, replicating the planner’s allocation under standard conditions. Together, the chapters provide an integrated framework linking emissions measurement, carbon markets, and network governance, offering concrete institutional and policy tools to improve the effectiveness of decarbonization strategies.