Essays on ecological transition, finance and inequalities

This thesis is submitted in partial fulfilment of the requirements for the degree of Doctor of Philosophy (PhD) programme in Economics (XXXVIII Cycle) at the Department of Economics, Roma Tre University. It comprises three original and stand-alone papers that combine theoretical analysis, macroeconomic modelling and empirical methods, unified by an investigation of the macro-financial implications of the low-carbon transition on distributive outcomes. The central concept guiding the research conducted between January 2024 and December 2025 is that of a “just” transition: the need to align the ecological transition with sustainable policy interventions that safeguard the income distribution of workers and lower-income groups, uphold social responsibility for environmental degradation and promote high and stable levels of employment, the wage share, and overall wellbeing. A fair societal transition requires policies that minimise distributional asymmetries rather than exacerbate them in the pursuit of decarbonisation. This challenging theme underscores the importance of coherent and coordinated policy design, particularly in light of the significant role of the financial sector in propagating both risks and benefits during the transition. These issues are examined across the three papers that follow, each of which seeks to offer a modest, yet meaningful, contribution to the contemporary literature. The first paper examines how macro-financial transition risks affect income distribution and, more broadly, macroeconomic dynamics. It reviews the non-equilibrium modelling literature on the low-carbon energy transition by applying a meta-model to identify its fundamental features and to assess the extent to which existing frameworks incorporate planetary boundaries, climate, and energy modules. More specifically, it analyses and systematises the drivers, transmission channels, and macroeconomic and distributive impacts of low-carbon structural change. The overarching objective is to shed light on the complexity of the transition, highlighting the central role of policy intervention in addressing the associated social and environmental challenges. The second paper is a modelling contribution. It extends an agent-based stock–flow consistent (AB-SFC) model by introducing a housing module calibrated on EUROSTAT data and incorporating firms’ low-carbon investment decisions alongside households’ demand for green loans to finance residential retrofits. The analysis is situated within a modern, financialised economy in which securitisation enables investors to access complex financial instruments, such as asset-backed securities (ABSs). The paper evaluates the macro-financial implications of a green retrofit scenario, with particular emphasis on the role of fiscal, redistributive, and financial policies in easing access to green credit, fostering energy-efficient refurbishment, and mitigating distributional inequalities. The final paper provides an empirical assessment of the theoretical and modelling frameworks developed in the preceding contributions. It investigates the distributive effects of climate-change mitigation policies across a panel of 29 OECD countries over the period 1990–2020. Using an instrumental-variables local projections (IV-LPs) framework, it estimates the dynamic impact of shocks to the OECD Environmental Policy Stringency (EPS) Index on multiple income-inequality indicators drawn from the World Income Inequality Database. To address potential endogeneity in policy adoption, the paper introduces a novel instrument based on climate-related central-bank communication and country-specific institutional characteristics, thereby addressing an important gap in the existing literature.