Who benefits from mobilising private sector investment for climate transition?

By Giedre Jokubauskaite / Debt and Green Transition blog series

The private sector has arguably caught up with an urgency of climate transition. This is visible from various climate initiatives that feature banks, insurers, consultancies, multinational corporations, and many others. The idea of ‘mobilising private investment’ for climate transition has also been an essential part of an increasingly popular policy discourse about how to finance green transition. The framing of private investments as key to the transition happens in two steps: firstly, articulating ‘a gap’ of finance needed to achieve climate objectives, and secondly, concluding that only the private sector, with support of the public sector in de-risking and incentive provision, can fill such a gap. Daniela Gabor aptly calls the systemic logic of this narrative the ‘Wall Street Consensus’. However, the privatization of a sector with the key support of public funds is not new: it has originally been applied to funding sustainable development, and now been revamped for policies on ‘green’ transition.

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What does green mean in green microfinance?

By Frédéric Huybrechs / Debt and Green Transition blog series

An important item on the political agenda of dealing with climate change is the question of how to finance adaptation and mitigation. There are many options on the table, but debt-based instruments are gaining ground. One of them is ‘green microfinance’ or, in other words, the practice of banks and development finance institution to integrate individuals and small-scale organizations into the financial (and green) architecture by means of small-scale financial services. This raises questions on how “green” is defined and how this financial instrument relates to debt and vulnerability in the broader socio-economic context.

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Green Finance under the Escazu Agreement

By Héctor Herrera / Debt and Green Transition blog series

Over the last few years, two parallel processes have unfolded in Latin America and the Caribbean (LAC). They are seldom considered together, but must be analyzed as intersecting: the drafting and implementation of the Escazú Agreement on environmental participation, and the expansion of the green bond market. I argue that green bonds, debt securities labeled as climate-environment-related and issued to borrow money from the financial market, need to be analyzed in combination with the Escazú Agreement, and with adequate policy action. Likewise, before any other climate finance instruments are tested, a legal and financial infrastructure should be set up to guarantee the basic protections reiterated by the Escazú Agreement: respect for the life and integrity of environmental defenders, access to environmental information, effective environmental participation, and access to justice in environmental matters.

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Who decides what is ‘green’ enough to be ‘green’?

By Stephanie Garciduenas Nieto / Debt and Green Transition blog series

As the preferred ‘green’ financial instrument to fund the green transition, Green Bonds (GB) have become leaders of the market, with S&P Global forecasting a 1$ trillion issuance for 2023 alone. Nonetheless, the green bond market continues to face criticism about greenwashing, lack of a common green definition for projects, transparency, and metrics to define what is ‘green’. Hence, there are key questions to ask about the way in which a bond becomes ‘green’, such as how a bond obtains its green label or certification and who can wield the power to assert the qualifying title.

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Friends, foes, or frenemies? Reflecting on the Varieties of Development Studies and relations with Economics

By Andy Sumner

At the recent EADI meeting in Budapest I reflected on the relationship between Development Studies and Economics, which has been a topic of debate among scholars for many, many years. While both share a common goal of addressing issues important to development, they often approach these issues from very different angles. Some argue that Development Studies and Economics can work together as friends, complementing each other’s strengths. Others believe that they are foes, with different worldviews and approaches that are irreconcilable. A third perspective suggests that they are frenemies, engaging in a love-hate relationship.

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