Trends and Prospects in Climate Finance

2022 ◽  
pp. 92-113
Author(s):  
Beata Zofia Filipiak
Keyword(s):  
Climate Change ◽  
Financial Support ◽  
Practical Knowledge ◽  
Climate Finance ◽  
Low Carbon ◽  
Future Prospects ◽  
Effective Response ◽  
Sustainable Finance ◽  
Fundamental Transformation ◽  
The Impact

An effective response to climate change that assures a sustainable development pathway will require a fundamental transformation towards a low carbon, climate-resilient societies. Each change need for solid financial support, financial solutions, and dedicated instruments, taking into account ESG factors and taking into account the impact of financial crises. This chapter aims to bring together theories, trends, dilemmas, and directional concepts to answer the question about changes in the existing paradigm of climate finance. On the other hand, the analysis of trends and presenting future prospects regarding sustainable finance will be aimed at enhancing the substantive and practical knowledge of the target audience. In addition, in this chapter, the following issues will be presented in particular: changes in the sustainable finance paradigm and the emergence of the climate finance paradigm, macro-and micro-financial aspects of climate change taking into account the influence of risk (including ESG risk), and a new landscape of climate finance.

scholarly journals Climate finance and disclosure for institutional investors: why transparency is not enough

2019 ◽  
Vol 160 (4) ◽  
pp. 565-589 ◽  
Author(s):  
Nadia Ameli ◽  
Paul Drummond ◽  
Alexander Bisaro ◽  
Michael Grubb ◽  
Hugues Chenet
Keyword(s):  
Climate Change ◽  
Institutional Investors ◽  
Financial Stability ◽  
Task Force ◽  
Efficient Market Hypothesis ◽  
Inadequate Response ◽  
Climate Finance ◽  
Implicit Assumption ◽  
Low Carbon ◽  
Theoretical Frameworks

Abstract The finance sector’s response to pressures around climate change has emphasized disclosure, notably through the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD). The implicit assumption—that if risks are fully revealed, finance will respond rationally and in ways aligned with the public interest—is rooted in the “efficient market hypothesis” (EMH) applied to the finance sector and its perception of climate policy. For low carbon investment, particular hopes have been placed on the role of institutional investors, given the apparent matching of their assets and liabilities with the long timescales of climate change. We both explain theoretical frameworks (grounded in the “three domains”, namely satisficing, optimizing, and transforming) and use empirical evidence (from a survey of institutional investors), to show that the EMH is unsupported by either theory or evidence: it follows that transparency alone will be an inadequate response. To some extent, transparency can address behavioural biases (first domain characteristics), and improving pricing and market efficiency (second domain); however, the strategic (third domain) limitations of EMH are more serious. We argue that whilst transparency can help, on its own it is a very long way from an adequate response to the challenges of ‘aligning institutional climate finance’.

scholarly journals CLIMATE FINANCE AND ITS GOVERNANCE: MOVING TO A LOW CARBON ECONOMY THROUGH SOCIALLY RESPONSIBLE FINANCING?

2009 ◽  
Vol 58 (3) ◽  
pp. 597-626 ◽  
Author(s):  
Benjamin J Richardson
Keyword(s):  
Climate Change ◽  
Clean Energy ◽  
Business Case ◽  
Current Approach ◽  
Potential Contribution ◽  
Climate Finance ◽  
Low Carbon ◽  
Socially Responsible ◽  
Responsible Investment ◽  
Low Carbon Economy

Abstract‘Climate finance’ is becoming an important feature of the emerging legal and policy regimes to address global warming. However, the current approach largely confines the financial sector to a transactional agent to mobilise capital for clean energy and to broker emission allowance trading. The sector's potential to leverage more sweeping positive changes in the economy as sought historically through the movement for socially responsible investment (SRI) has been insufficiently acknowledged. Indirectly, by regulating greenhouse gases the legal system is helping to create a business case for investors to respond to climate change threats. However, the potential contribution of SRI to address climate change problems more comprehensively is presently limited owing to inadequate governance frameworks, as well the sector's increasing abandonment of its traditional ethical agenda.

scholarly journals Editorial: Challenging issues in risk governance and control

2020 ◽  
Vol 9 (4) ◽  
pp. 4-6
Author(s):  
Stefania Sylos Labini
Keyword(s):  
Climate Change ◽  
Risk Governance ◽  
Insurance Sector ◽  
Resilient Communities ◽  
Sustainable Finance ◽  
Current Context ◽  
Corporate Social ◽  
And Control ◽  
The Impact

The leitmotif of this fourth issue of the journal seems to revolve around the role of finance in the current context of climate change. Concerns about the disastrous effects of climate change affect many areas. The rapidity of climate change requires urgent action from governments, industries and businesses to build more resilient communities and reduce the impact of disasters. The most recent example is the disaster that is affecting Australia, with fires fueled by record temperatures and entrenched drought conditions. Coordinated national action is critical for managing the impacts of this phenomenon. Although the most immediate financial impact of catastrophic events regards the insurance sector, the whole world of finance is affected by these phenomena. In this context, areas of growing interest for scholars at the international level are sustainable finance, corporate social responsibility and insurance.

scholarly journals Investigating the Impact of COVID-19 Disruption on the Decarbonisation Agenda at Airports: Grounded or Ready for Take-Off?

2021 ◽  
Vol 13 (21) ◽  
pp. 12235
Author(s):  
Peter Hemmings ◽  
Michael Mulheron ◽  
Richard J. Murphy ◽  
Matt Prescott
Keyword(s):  
Climate Change ◽  
Climate Change Mitigation ◽  
Business Models ◽  
Resource Constraints ◽  
Mitigation Strategies ◽  
Government Support ◽  
Low Carbon ◽  
Net Zero ◽  
The Impact ◽  
Change Mitigation

COVID-19 has had wide-ranging impacts on organisations with the potential to disrupt efforts to decarbonise their operations. To understand how COVID-19 has affected the climate change mitigation strategies of Airport Operators (AOs), questionnaires and semi-structured interviews with Sustainability Managers were undertaken in late 2020 amidst a period of disruption. While all reported that COVID-19 impacted delivery of interventions and projects to mitigate climate change, the majority stated that it would not impact their long-term climate goals, such as Net Zero by 2050. The most popular climate change mitigation interventions AOs intend to deploy between now and 2030 are on-site renewables and Electric Vehicles and related infrastructure. Engineered carbon removal interventions were considered highly unlikely to be deployed in this timeframe, with potential implications for Net Zero decarbonisation pathways. Despite the severe impacts of COVID-19 on the sector, results indicate that AOs remain committed to decarbonisation, with climate change action remaining the key priority for airports. Given ongoing financial and resource constraints, AOs will need to explore new business models and partnerships and nurture collaborative approaches with other aviation stakeholders to not only maintain progress toward Net Zero but “build back better”. Government support will also be needed to stimulate the development of a sustainable, resilient, low-carbon aviation system.

Prospects for Climate Change Litigation in China

2019 ◽  
Vol 8 (02) ◽  
pp. 349-377 ◽  
Author(s):  
Yue Zhao ◽  
Shuang Lyu ◽  
Zhu Wang
Keyword(s):  
Climate Change ◽  
Climate Change Policy ◽  
Low Carbon ◽  
Regulatory State ◽  
Public Authorities ◽  
Public Interest Litigation ◽  
Legal Rules ◽  
Legal Traditions ◽  
Change Policy ◽  
The Impact

AbstractWhile legal scholarship seeks mainly to assess the impact of climate change litigation (CCL) on the regulatory state and on climate change policy in common law countries, the potential influence of government climate policy on the judicial practices of jurisdictions with different legal traditions attracts much less attention. This article fills the gaps by exploring how courts in China, an authoritarian country with a civil law tradition, react to government climate policies and how this judicial response might affect relevant legal rules and eventually contribute to climate regulation. An empirical analysis of 177 Chinese judicial cases reveals that CCL in China consists mostly of contract-based civil actions steered by the government's low-carbon policies. Moreover, although the prospects of CCL against public authorities in China remain very bleak, there is scope for the emergence of tort-based CCL, backed by government policies. In this respect, recent tort-based public interest litigation on air pollution in China may serve as a substitute or, more promisingly, a gateway to the emergence of a tort-based branch of Chinese CCL.

Analysis of External Climate Finance Access and Implementation: CIF, FCPF, GCF and GEF Projects and Programs by the Inter-American Development Bank

2021 ◽  
Author(s):  
Sofía Viguri ◽  
Sandra López Tovar ◽  
Mariel Juárez Olvera ◽  
Gloria Visconti
Keyword(s):  
Climate Change ◽  
Scale Up ◽  
Transformational Change ◽  
Lessons Learned ◽  
Climate Finance ◽  
Low Carbon ◽  
Global Environment Facility ◽  
Climate Action ◽  
External Sources ◽  
Resilient Infrastructure

In response to the Paris Agreement and the Sustainable Development Goals (SDGs), the IDB Group Board of Governors endorsed the target of increasing climate-related financing in Latin America and the Caribbean (LAC) from 15% in 2015 to 30% of the IDB Groups combined total approvals by 2020. Currently, the IDB Group is on track to meet this commitment, as in 2018, it financed nearly US$5 billion in climate-change-related activities benefiting LAC, which accounted for 27% of total IDB Groups annual approvals. In 2019, the overall volume and proportion of climate finance in new IDBG approvals have increased to 29%. As the IDB continues to strive towards this goal by using its funds to ramp-up climate action, it also acknowledges that tackling climate change is an objective shared with the rest of the international community. For the past ten years, strategic partnerships have been forged with external sources of finance that are also looking to invest in low-carbon and climate-resilient development. Doing this has contributed to the Banks objective of mobilizing additional resources for climate action while also strengthening its position as a leading partner to accelerate climate innovation in many fields. From climate-smart technologies and resilient infrastructure to institutional reform and financial mechanisms, IDB's use of external sources of finance is helping countries in LAC advance toward meeting their international climate change commitments. This report collects a series of insights and lessons learned by the IDB in the preparation and implementation of projects with climate finance from four external sources: the Climate Investment Funds (CIF), the Forest Carbon Partnership Facility (FCPF), the Green Climate Fund (GCF) and the Global Environment Facility (GEF). It includes a systematic revision of their design and their progress on delivery, an assessment of broader impacts (scale-up, replication, and contributions to transformational change/paradigm shift), and a set of recommendations to optimize the access and use of these funds in future rounds of climate investment. The insights and lessons learned collected in this publication can inform the design of short and medium-term actions that support “green recovery” through the mobilization of investments that promote decarbonization.

Key Drivers and Barriers for the Mobilization of Institutional Investment in Climate-Related Projects

2021 ◽  
Vol 26 (11) ◽  
pp. 1236-1244
Author(s):  
S. I. Nikulina
Keyword(s):  
Climate Change ◽  
Institutional Investors ◽  
Climate Finance ◽  
Low Carbon ◽  
Financial Policies ◽  
Institutional Investment ◽  
Responsible Investment ◽  
Climate Risks ◽  
Change Projects ◽  
Key Drivers

The presented study focuses on the problem of increasing the participation of institutional investors in climate finance.Aim. The study aims to identify key drivers and barriers for increasing the participation of institutional investors in climate finance.Tasks. The author considers the transformation of the concept of the fiduciary debt of institutional investors; examines international efforts to address climate risks and mobilize institutional investment in low-carbon projects; analyzes factors preventing wider engagement of institutional investors in climate finance.Methods. This study used general scientific methods of cognition, such as synthesis and analysis.Results. The transformation of the concept of the fiduciary debt of institutional investors is described and its modern interpretation is provided. Factors facilitating the consideration of climate risks and increasing the role of institutional investors in climate finance are identified. The main barriers to considering climate change issues in the investment decisions made by institutional investors are identified.Conclusions. Common approaches to financial policies and regulations are being actively developed at the international level to help mobilize institutional investment in climate change projects. Credible international structures in the field of responsible investment, such as PRI, have a significant influence on the way investors address climate-related risks and opportunities when making decisions. Along with the drivers for institutional investment, numerous barriers still remain.

scholarly journals Low-Carbon Awareness and Behaviors: Effects of Exposure to Climate Change Impact Photographs

SAGE Open ◽  
2021 ◽  
Vol 11 (3) ◽  
pp. 215824402110314
Author(s):  
Yong Liu ◽  
Jin Liu ◽  
Yunpeng Su
Keyword(s):  
Climate Change ◽  
Climate Change Impact ◽  
Control Group ◽  
Low Carbon ◽  
Carbon Policy ◽  
Change Impact ◽  
And Behaviors ◽  
And Behavior ◽  
The Impact ◽  
Experimental Group

Exposure to images on the impact of climate change has been shown to trigger low-carbon awareness and behaviors in individuals. In this study, pre-exposure to photographs of climate change impact, low-carbon awareness, and behaviors of a control group and an experimental group were not significantly different. However, following exposure, the two groups showed significant differences in terms of low-carbon awareness and behavior. Moreover, the experimental group was found to have better low-carbon awareness and behavior than the control group without exposure. Therefore, exposure to climate change impact photographs may play an important role in promoting low-carbon awareness and behavior. The findings have significant implications for climate change and low-carbon policy-making.

scholarly journals Climate Finance and Its Role towards the Transition to Low-Carbon, Climate-Resilient Development in Ethiopia

2019 ◽  
Author(s):  
Zelalem Dendir
Keyword(s):  
Climate Change ◽  
Sustainable Development ◽  
Climate Adaptation ◽  
Rainfall Variability ◽  
Strong Relationship ◽  
Developed Countries ◽  
Gdp Growth ◽  
Climate Finance ◽  
Low Carbon ◽  
Recent Emergence

Achieving and sustaining stability for economic growth remain the greatest and most immediate development challenge for Ethiopia. For natural resource-based economies especially maintaining stability and growth depends fundamentally upon climate change adaptation and mitigation. The close links between climate and Ethiopia’s economy are reflected by the strong relationship between GDP growth rate and rainfall variability. A study by the World Bank projects that unless steps to build resilience are effective, climate change will reduce Ethiopia’s GDP growth by between 0.5 and 2.5% each year. Along with the challenges posed by climate change, a number of development opportunities are emerging in response to climate change which includes access to international climate finance. The international response to climate change in the form of external development finance plays a key role to support developing countries in their transition to a low-carbon, climate-resilient and sustainable development pathway. Therefore, this study was conducted to assess the flow and the overall contribution of climate finance to sustainable development in Ethiopia. Specifically, focused on outlining how climate finance is currently reconciled in the existing Ethiopian climate change governance and its contribution to sustainable development. In order to achieve these objectives, data were collected from different sources. The Rio Marker methodology applied to review climate financial flow over the 5 year period. The result reveals that, climate change is central to development agendas despite its recent emergence in the mainstream, with various initiatives under way to combat or reduce its impacts in Ethiopia. In addition, the amount of climate finance from the developed countries to Ethiopia shows some fluctuation for the past five years. In general, the overall flow of climate finance mostly targeted climate adaptation actions which spur and enable the transition towards climate-resilient growth and sustainable development.

scholarly journals THE NEED FOR A PARADIGM SHIFT IN FINANCE: SUSTAINABLE CORPORATE FINANCE

2021 ◽  
Vol 13 (1) ◽  
pp. 33-38
Author(s):  
Simona Marcela AGÂRBICEANU ◽  
◽  
Tatiana PĂUN ◽  
Keyword(s):  
Corporate Finance ◽  
Critical Role ◽  
Low Carbon ◽  
Responsible Behavior ◽  
Recent Developments ◽  
Decision Making Processes ◽  
Sustainable Finance ◽  
Financial Decision ◽  
The Impact

Under current global conditions, finance may play a critical role in allocating investment to sustainable enterprises and projects, thereby hastening the transition to a low-carbon circular economy. Finance promotes risk assessment and, as a result, can aid in addressing the inherent ambiguity surrounding environmental concerns such as the impact of carbon emissions on climate change. In recent decades, thinking about sustainable finance has progressed through several stages, with the emphasis steadily changing from short-term profit to long-term value creation. This study seeks to conduct an examination of the concept and premises of sustainable corporate finance based on literature research, with the goal of bringing arguments to the need to shift the financial paradigm. This emerging perspective emphasizes that, while profit creation and maximization are important, firms must also seek other goals that have an impact on society, such as those connected to sustainable development. The integration of environmental, social, and governance components into financial decision-making processes is referred to as sustainable finance. Recent developments highlight the importance of businesses' commitment to responsible behavior in transforming the company into a truly sustainable enterprise that adds value to the business, society, and the environment.

Sign in / Sign up

Export Citation Format

Share Document