Debt and Green Transition Series – Debating Development Research

27/06/202304/07/2023

Managerialism versus Climate Justice in financing Loss and Damage

By David Rossati Debt and Green Transition blog series

Several commentaries on the latest climate negotiations at the UN hailed the creation of a new international climate fund as a historic breakthrough. Unlike other climate funds, this entity will manage a new stream of funding dedicated to ‘loss and damage’ faced by vulnerable countries. Within the realm of the Paris Agreement and the UN Framework Convention on Climate Change (UNFCCC), ‘loss and damage’ loosely refers to the economic and non-economic losses faced by vulnerable countries due to extreme and slow onset events triggered by climate change, such as heatwaves or sea level rise. In other words, loss and damage is a multilateral stream of law and policy, in addition to mitigation, adaptation, and finance which deals with some crucial and unsolved tensions of the so called ‘green transition’: those between industrialized countries and historical polluters on one side, and, on the other, the most vulnerable countries suffering the most from destructive climatic events to which they have contributed little or nothing.

20/06/202304/07/2023

Blue bonds: Shifting the responsibility innovatively

By Arınç Onat Kılıç Debt and Green Transition blog series

When we think of debt, we cannot overlook the role it plays in the blue economy. There is an increasing emphasis on the importance of making financial flows consistent with improving ocean ecosystems, along with the recognition of the role oceans and seas play in climate change mitigation and adaptation. Through the efforts of financing climate action and developing blue economies, blue finance has created a legitimate space for financial actors to intervene in funding projects, standard-setting and combining debt, equity and the protection of the marine environment. What’s missing in the mainstream discussions over the blue bond sector is the way in which debt dynamics transform states’ commitments and differentiated responsibilities under the international environmental law – as introduced by Principle 7 of the Rio Declaration – by promoting and legitimizing certain forms of sovereign climate finance.

15/06/202304/07/2023

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.

13/06/202304/07/2023

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.

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.