{"title":"Artificial intelligence and climate risk: A double machine learning approach","authors":"Hua Yin , Xieyu Yin , Fenghua Wen","doi":"10.1016/j.irfa.2025.104169","DOIUrl":null,"url":null,"abstract":"<div><div>We study the use and environmental impact of AI technologies. We propose a measure of the country-level AI development index. Utilizing the double machine learning method, we discover a net mitigating impact of AI on climate risk. Mechanism analysis indicates that this influence primarily stems from advancements in resource utilization efficiency, the promotion of green innovation, the reinforcement of environmental policy effectiveness, and the augmentation of green finance. Heterogeneity analysis reveals that the mitigating effect of AI on climate risks is predominantly observed in developed countries and those with better institutional environments. Our results imply that while AI overall reduces climate risks, it can also contribute to the exacerbation of climate-related inequalities.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"103 ","pages":"Article 104169"},"PeriodicalIF":9.8000,"publicationDate":"2025-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Review of Financial Analysis","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S105752192500256X","RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"2025/4/1 0:00:00","PubModel":"Epub","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
We study the use and environmental impact of AI technologies. We propose a measure of the country-level AI development index. Utilizing the double machine learning method, we discover a net mitigating impact of AI on climate risk. Mechanism analysis indicates that this influence primarily stems from advancements in resource utilization efficiency, the promotion of green innovation, the reinforcement of environmental policy effectiveness, and the augmentation of green finance. Heterogeneity analysis reveals that the mitigating effect of AI on climate risks is predominantly observed in developed countries and those with better institutional environments. Our results imply that while AI overall reduces climate risks, it can also contribute to the exacerbation of climate-related inequalities.
期刊介绍：
The International Review of Financial Analysis (IRFA) is an impartial refereed journal designed to serve as a platform for high-quality financial research. It welcomes a diverse range of financial research topics and maintains an unbiased selection process. While not limited to U.S.-centric subjects, IRFA, as its title suggests, is open to valuable research contributions from around the world.
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