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This paper examines how monetary policy can be calibrated to promote a greening of finance. The paper reviews existing literature and notes a tendency to either focus narrowly on one policy instrument or provide a menu of options, without much depth or discrimination. This Perspective paper undertakes a theory-based analysis of green monetary policy options using an institutional approach to monetary economics. In so doing, it identifies a policy mix that would reorient finance by structurally modifying the relative incentives of financing green vs dirty assets. More specifically, the proposed green central banking strategy consists in the combined adoption of several, recalibrated monetary policy instruments. The two main ones are core elements of central banks' collateral policies: making (more) green assets eligible in credit operations with central banks and using so-called 'haircuts' to give green assets preferential treatment over dirty assets in those credit operations. Combined, the adoption of the proposed, recalibrated instruments promises to reorder the collateral asset hierarchies that are the backbone of modern financial systems, providing strong financial incentives for enhanced financing of investment in green assets and divestment from dirty assets. Monetary policy can help speed up a greening of the financial sector. Enhanced financing of green assets, as well as divestment from dirty assets, can be incentivized through a range of monetary policy tools. Among the most potent green monetary policy tools is differentiated treatment of green and dirty assets in credit operations, known as collateral policy. Several green monetary policy options can be pursued without compromising other monetary policy objectives (such as price stability). While most central banks currently remain reluctant to engage proactively with such policy tools, the increasing manifestation of climate change is likely to erode such resistance in coming years. [ABSTRACT FROM AUTHOR]

The last two decades have seen an increase in climate financing channelled to the Global South from multiple sources, putting a spotlight on climate finance coordination challenges in recipient countries. However, the climate finance coordination debate has largely been centred at climate finance provision at the global level. Emerging literature has called on recipient countries to establish effective climate finance coordination mechanisms. Yet, the calls have not clarified what accounts for an effective coordination mechanism. This paper addresses the gap by analyzing stakeholder perceptions of effective climate finance coordination in Kenya. Kenya has instituted a legal and institutional framework to guide climate finance coordination, but challenges of coordination persist. Using the political economy framework, the paper analyzes political economy factors influencing stakeholder perceptions and climate change policy implementation to identify political contestations that need to be reconciled. Data is drawn from relevant literature, 29 key informant interviews and 4 focus group discussions at the national level in Nairobi and at the sub-national level in Turkana County. Deductive thematic analysis is adopted for coding and analyzing data. Results indicate that different ideologies, interests, incentives, politics, power relations and contestation over resources largely influence stakeholder perceptions of an effective climate finance coordination mechanism and climate policy implementation. The operationalization of the National Climate Change Council and the National Climate Change Fund are the most contested. The paper calls on policy actors to reconcile political issues of contention for recipient countries to institute coordination mechanisms that gain ownership and widespread legitimacy from stakeholders. Underlying political economy factors including different ideologies, interests, politics, incentives, power relations and contestation over resources largely influence stakeholder perceptions of effective climate finance coordination as well as climate change policy implementation. The consequential political contestations need to be reconciled; otherwise, the established coordination mechanism is less likely to gain ownership and widespread legitimacy from climate change stakeholders. This calls for meaningful and extensive stakeholder engagements and consensus building to minimize contention, particularly over the operationalization of the National Climate Change Council and the National Climate Change Fund in Kenya. [ABSTRACT FROM AUTHOR]

Citizens' assemblies on climate change are increasingly popular to support democratic decision-making. Such Climate Assemblies (CAs) convene representative groups of citizens formulating policy proposals after hearing experts and deliberating intensely. CAs may help addressing climate policy issues more effectively partly because their members need not worry about re-election. CAs' effectiveness depends on their design such as the issues chosen (or not chosen) for deliberation. Agenda-setters exert substantial power by selecting certain issues and by choosing framings that benefit some solutions over others. In this paper I ask: What characterizes agendas that are suitable and legitimate for deliberation in CAs? The aim is to support practitioners in making informed agenda choices for CAs by providing a list of ten widely accepted guiding principles based on expert interviews, policy documents, and information gathered from the Knowledge Network on Climate Assemblies (KNOCA). The paper systematically discusses trade-offs of various agenda choices in the light of different CA rationales. Results show that those with system-supporting rationales tend to favour narrower agendas tailored to political demands aiming to increase immediate policy impact; those with system-disrupting rationales prefer more open agendas allowing citizens to challenge existing political practices and worldviews. Results support earlier arguments that distinctions of entire deliberative processes in either top-down or bottom-up are too simplistic and that a tool-box approach is more useful. Insights appear relevant for debates of deliberative minipublics more generally. Future research should investigate whom to involve in setting CA agendas and with how much power. Effective agenda design hinges on rationales on how to achieve assembly objectives which depend on authorities' ambition for climate action. Given high ambition, system-supportive rationales aiming for policy impact favour narrower agendas tailored to demands of the policy process but risk low transformativeness. Given low ambition, system-disruptive rationales aiming to challenge established practices and worldviews favour more open agendas but risk low impact if assemblies are not politically embedded or able to mobilize opposition groups. Assembly designs are seldom purely supportive or disruptive but often hybrid. Agenda-setting has many dimensions allowing for productive combinations of disruptive and supportive elements tailored to contexts. [ABSTRACT FROM AUTHOR]

This paper examines the effects of the collateral-based monetary policy, implemented by the People's Bank of China, on green financing costs. Employing a Difference-in-Differences (DID) method to examine credit spreads of financial bond in primary and secondary markets from 2017 to 2019, our findings highlight a significant decrease of 26 basis points (bps) in the financing costs of green financial bonds in the primary market, with a 12-bps decline in the secondary market post-policy. Our study underscores the crucial role of implicit credit enhancement provided by the People's Bank of China's collateral endorsement. Interestingly, the liquidity provision mechanism, where investors pay premiums to secure liquidity support, does not find empirical backing in the specific context of China's bond market. These findings illuminate the effectiveness of collateral-based monetary policies in reducing green financing costs, offering valuable insights for using collateral strategies to green monetary policies. Collateral-based policies' success in reducing green financing costs suggests a strategic avenue for supporting green monetary policy goals. Implicit credit enhancement serves as a crucial mechanism driving this cost reduction. The People's Bank of China's experience exemplifies the robustness of such policies without requiring strict collateral scarcity, highlighting broad policy applicability. Collateral-based monetary policy could drive the 'green premium', broadening green bond appeal beyond just environmentally-focused investors. [ABSTRACT FROM AUTHOR]

Local climate change impacts hit hard at smallholder farmers in developing countries due to their overreliance on rain-fed farming. Whilst ecosystem-based adaptation (EbA) to climate change holds an answer to smallholder farmers' adaptation needs, there are inadequate empirical results from the field to support formulation of effective adaptation strategies. Hence, this paper aimed at investigating EbA practices adopted by farmers, in North-Western Ghana to ameliorate local climate change impacts, with emphasis on benefits and associated challenges. The study methods were cross-sectional survey, mixed methods, and case study approach, with all data collected in the Wa West District of Ghana. Data were gathered using questionnaire, focus group discussion (FGD) and interviews. Data from the questionnaire were entered into SPSS version 20 to analyze associations between the variables using cross-tabulation. Descriptive statistics, in the form of percentages and frequencies, were then generated from the survey data and integrated with the qualitative information in the presentation of results. Also, statistical significance of the relationships was analyzed using chi-square test. Chi-squared tests were done to determine associations between socio-economic and environmental factors, and challenges and benefits associated with the adoption of EbA practices. This was necessary to give further insights to inform policy-related decisions aimed at addressing EbA adoption challenges. The results revealed that farmers use a combination of practices rather than single practice. Farmers integrated crops and trees and keep local breed of farm animals. Benefits of EbA included improvements in soil fertility leading to high crop yield and availability of food and income. Challenges of adopting EbA were the long timespan for benefits of most EbA practices to begin to accrue, lack of extension information and increasing cost of hired labour. It is recommended that tree integration should emphasis trees with multiple benefits and compatible with food crops. For the achievement of food security policy objectives, agroforestry promotion should focus on the integration of fruit tree crops and food crops to address hunger and increase farmers' incomes. Mobile extension technology should be exploited by government for the provision of EbA-specific information to farmers to bridge the extension services gap. Climate change policy of government should include the planting of non-fruit trees as windbreaks to provide multi-purpose benefits including provision of stakes for yam farmers, live-fencing and firewood for women. There is the need for government policy objectives to include EbA by farmers under the flagship 'planting for food and jobs' programme. [ABSTRACT FROM AUTHOR]

Climate change is a key socioeconomic and environmental concern in South Africa. The South African government introduced several climate change initiatives to address the impacts of climate change, resulting in the proliferation of climate adaptation policies across spheres of government. This paper studies different climate change adaptation policies and climate policy paradigms (CPP) to understand the adaptation landscape; it explains and compares the changes in CPP in South Africa over time. We mapped 40 policy documents from 2004 to 2022, which shows 12 national policies, 12 provincial (sub-national) policy documents and 14 metropolitan city policy documents. We then used 12 national policy documents to illustrate and understand the CPP. The research shows that different stakeholders have shaped climate change adaptation policy, both private and public firms advised on climate change policy and there are a number of different funding partners supporting the adaptation policy like GEF, C40 and GIZ. The changing policy environment has introduced new frameworks, objectives and processes. Therefore, more efforts will be needed going forward to guide adaptation policy across national, provincial and local governments. We find that several CPPs have emerged, that is different paradigms encompassing a range of policy goals, framings and instruments. The present National CC Adaptation Strategy (NCCAS) mandates adaptation across all levels of government and allows all important stakeholders to address climate change consequences. This NCCAS increases the number and ambition of adaptation policy, encourages integrated approaches, policy coherence and clear direction on how to handle climate risks and impacts in varied South Africa and its global commitment. Changes in policy paradigm enable the use of new policy instruments, including funding and budget mechanisms. Finally, climate adaptation policy has become more ambitious and stringent, requiring all levels of government to plan for climate change. The climate change policy landscape in South Africa has grown over the past 18 years, with policy development across different spheres of government (national, sectoral, provincial and metros), New CPPs have emerged, supported by new policy frames, goals and instruments. The NCCAS provides a clear policy goal, which also provides new policy instruments to implement climate actions and acts to enhance integrated approaches, The lack of domestic budget allocation remains a challenge for national government, but external partnerships have begun to provide support for policy development. Notably, a shift from a flexible to stringent approach to climate policy is needed to deliver effective climate action. [ABSTRACT FROM AUTHOR]

Climate change policies are prepared in a power-loaded environment, where different policy actors interact to meet their personal or collective interests. This paper argues that the 'power interplay' between actors plays a significant role in shaping and re-shaping climate change policies. We present examples from South Asia (Nepal, India, Bangladesh, and Pakistan) to show how actors' power interplay at the local, sub-national, national and transboundary levels influences climate change policy-making. We show that negative effects of power interplay are prominent in the climate policy domain of South Asia, including short-termism of local adaptation plans, exclusion of certain policy actors in the policy-making processes, lack of transboundary-level adaptation, and lack of coordination between actors. Nuances also exist, such as the state's authority in prioritizing technical solutions, exclusionary design and implementation of climate policies, and an agenda of securitization; these can further marginalize the actors involved in climate change policy processes. The negative effects of power interplay in South Asia can limit the success of on-the-ground implementation of adaptation and mitigation strategies, limit adaptive capacity among communities, and possibly counter the development of a strong climate change solutions space. Lastly, we argue that there are no silver bullet solutions to power asymmetries and appeal to policy actors – in South Asia and elsewhere – to design context-specific and power-sensitive policy-making approaches. Negative effects of power interplay have led to the exclusion of certain policy actors (especially communities at risk) in policy-making processes and a lack of transboundary-level adaptation in South Asia. Hard infrastructure-based adaptation measures tend to exacerbate the vulnerability of the communities at risk in South Asia. Policy actors must design context-specific and power-sensitive policy-making climate adaptation and mitigation approaches to reduce the negative impacts of power interplay. [ABSTRACT FROM AUTHOR]