Debating Development Research

08/06/202304/07/2023

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.

06/06/202304/07/2023

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.

01/06/2023

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.

30/05/202304/07/2023

The narrow allure of bridging funding gaps with blended finance

By Patrick Bigger / Debt and Green Transition blog series

The last decade has seen the spectacular growth of a new genre of Development Bank and consultancy report- the Gap report. Covering issues from adaptation, to renewable energy, to biodiversity conservation, to infrastructure and more, these gap reports all try to quantify the shortfall between existing and needed finance to achieve specified outcomes or targets. The overarching message of all this ‘gap talk’ is that investment is not keeping pace with huge and growing financing needs to address the ecological crisis. Gap talk can offer useful numbers to understand the magnitude of challenges for achieving just decarbonization, building more resilient cities, or ending the 6th extinction. But the ubiquitous takeaway, steeped in capitalist-realism, is that there is not, and never will be, enough public financing from governments or International Financial Institutions (IFIs) to achieve these funding targets. Further, gap talk often obscures why this funding is needed in the first place, or the political economic mechanisms that are actually making the gaps grow, like harmful subsidies for oil and destructive agricultural practices or predatory debt relationships that prevent countries in the Global South from investing in climate-safe infrastructure or biodiversity safeguards.

17/05/202304/07/2023

Debt and green transition: An Introduction

By Tomaso Ferrando and Giedre Jokubauskaite / Debt and Green Transition blog series

This post introduces a blog series where multiple authors explore the role of debt as one of the most popular financial tools behind the ‘green transition’. Green and sustainability bonds, green microfinance, insurance and loan-enabled ‘loss and damage’ finance, are but a few of many variations of the governance logic, which uses debt to ‘green’ the economic system, while at the same time fuelling the financial and economic structures that lead to ecological destruction and a breakdown of social cohesion in the first place. If debt is so key, it must first of all be understood in its legal or financial construction and, more importantly, in the material and ideological implications that its use produces and consolidates.