Luca is an economist, working at the intersection of environmental economics, industrial organisation, and finance. His current research projects include work on market-based instruments and climate finance.


Luca is currently Professor at the University of Edinburgh Business School and holds the Chair in Climate Finance. Luca was an Associate Professorial Research Fellow at the Grantham Research Institute on Climate Change and the Environment until 2022. He holds a PhD in Finance from the University of Zurich. He is also an alumnus of the Joint Program on the Science and Policy of Global Change (MIT).

Research interests

  • Climate change mitigation polices;
  • Sustainable Finance
  • Environmental and Resource Economics
  • Macroeconomics of climate change


Research - 2023

In this paper the authors use Credit Default Swap (CDS) spreads to construct a forward-looking, market-implied carbon risk factor and study how, where and when carbon risk affects firms’ creditworthiness by examining whether firms’ exposure to carbon risk is reflected in the market prices of their CDS contracts. Read more

Research - 2020

Research - 2019

Research - 2018

Research - 2017

Research - 2016

Emissions Trading Systems (ETSs) with fixed caps lack provisions to address systematic imbalances in the supply and demand of permits in response to economic shocks. This paper proposes a new mechanism which adjusts the allocation of permits based on the current bank of permits to create a dynamic system of permit allocation. Read more

Research - 2015

The decision of whether to retain forest or convert to another land use is affected by uncertainty over future land use returns. This paper examines the design of conservation payments to landowners under uncertainty. Payments are either indexed to the returns from deforestation (agriculture), or to a market value associated with forest nonuse benefits. Payment size depends on the degree of correlation between payments and agricultural returns, and their relative volatility. Market-based payments for reducing emissions from deforestation and degradation (REDD) are simulated for Brazilian soybean growers. Payments indexed to carbon prices are larger than those indexed to international soybean prices. (JEL Q23, Q24) Read more

Research - 2014

Research - 2013

Research - 2012

Research - 2011

Research - 2010


Policy - 2022

This submission to the UK ETS Authority consultation on ‘Developing the UK Emissions Trading Scheme (ETS)’ provides evidence on implementing a net zero consistent ETS cap, Free Allocation policy, the expansion of the UK ETS to additional sectors, and incorporating greenhouse gas removal into the scheme. Read more

Policy - 2021

Policy - 2020

This is a response to the Bank of England's discussion paper, 'The 2021 biennial exploratory scenario on the financial risks from climate change'. The response has been prepared by authors from the Grantham Research Institute on Climate Change and the Environment at LSE, the Grantham Institute – Climate Change and the Environment at Imperial College London, and the University of Edinburgh Business School. Read more

Policy - 2019

Policy - 2017

Policy - 2016

This submission explores whether the UK should seek to stay in or leave the EU emissions trading system (EU ETS) as part of Brexit negotiations. It finds that leaving the EU ETS would result in the UK losing access to low-cost emission reduction opportunities that are only available in what is currently the world’s largest carbon market. It also highlights that leaving the EU ETS to link with other existing or planned emissions trading systems could generate significant administrative costs that potentially offset any economic benefits. Read more

Policy - 2015

Policy - 2014

Policy - 2013

Policy - 2011


Books - 2015

Books - 2013


Events - 2022

Events - 2021

Events - 2020


News - 2023

News - 2020

News - 2017

News - 2016

News - 2015

News - 2014

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The European Commission has resisted calls for a carbon “central bank” to revive Europe’s moribund emissions trading system but is poised to unveil a less ambitious plan to fix flaws in a market that has foundered since the global financial crisis slashed prices. Read more

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