Analysis of the Quantitative Transmission Mechanism of Climate Risk in Green Financial Asset Pricing

Abstract

With the deepening of global climate governance and low-carbon transformation, the “green attribute” of green financial assets has broken through the traditional reputation premium category, gradually achieving quantitative pricing through three core channels: carbon premium, climate scenario discount, and default structure, and transforming into tradable additional rates of return or interest spreads. This article systematically reviews high-level literature at home and abroad, discusses the theoretical logic, empirical evidence, and transmission mechanism of the three major quantitative channels, analyzes the correction path of climate risk on traditional asset pricing models, explores the controversies and challenges in current pricing practices, and looks forward to future research directions. Research has found that the physical and transitional dimensions of climate risk have been deeply embedded in the valuation system of green financial assets, with carbon cost internalization, scenario dynamic discounting, and default risk reconstruction becoming the core pricing logic. However, issues such as insufficient data standardization and model heterogeneity still constrain quantification accuracy. This article aims to provide literature support for the improvement and practical application of green financial asset pricing theory, and to assist in the market-oriented pricing of climate risks in finance.