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This paper presents a novel theoretical framework for incorporating climate risks and adaptation investments into infrastructure debt pricing. Utilizing the Capital Asset Pricing Model (CAPM), the framework extends the conventional modeling of infrastructure project revenues and costs to include climate risk considerations. It proposes three climate-informed revenue and cost formulations: adjustmentment of mean and standard deviation, incorporation of extreme climate events via Pareto and Poisson distributions, and a climate-informed cost model that includes adaptation investment. The paper demonstrates the application of this model in pricing a loan for a Light Rail Transit project in Costa Rica, introducing the concepts of "flood risk premium" and "adaptation curves". This study not only offers a novel lens through which to view infrastructure investment under climate uncertainty but also sets the stage for transformative policy and practice in financial risk assessment, encouraging a shift towards more sustainable and resilient infrastructure development. [ABSTRACT FROM AUTHOR]

The African continent is the locus of immense social, political and economic change. Policymakers who want to introduce and implement coherent policy in sustainable development face a dilemma: should they emphasise policies that lead to economic prosperity or ones that protect the world's precious climate? Moreover, while Africa is often lauded as a vast and relatively untapped source of natural resources that spell future economic prosperity, it is worth noting that the mere presence of natural resources on the continent has not always translated into economic developments or benefits to those communities who need it most (this phenomenon is known as the resource curse). Africa's oceans also face multifaceted threats that require effective governance channels and appropriate financing mechanisms if they are to be protected and developed for the benefit of coastal communities and Africa's blue economy at large. This commentary article discusses serious concerns raised by the African Union's (AU) African Continental Free Trade Area (AfCFTA) regarding the existing incentives to develop maritime infrastructure and so generate economic gains from the sea, which operate in the face of pressures from increasing maritime activities such as commercial fishing and the proliferation of offshore energy projects. This commentary argues that governance frameworks exist to address increasing climate variability and heighten interest in Africa's ocean economy, but that these initiatives lack appropriate guidelines on financing opportunities and require stronger implementation. Innovative financing solutions are identified that offer Africa fresh and actionable opportunities to raise necessary funds to ensure that oceans are protected and coastal communities can benefit from the development of the ocean economy, such as blue bonds and the Great Blue Wall initiative. The paper highlights the 2022 United Nations (UN) Climate Change Conference (COP27) as a strategic occasion for African countries to raise international financial support for the proper implementation of their blue economy aspirations. [ABSTRACT FROM AUTHOR]

Caribbean Small Island Developing States (SIDS) are highly vulnerable to the impacts of climate change. Given high mitigation and adaptation costs and constrained domestic finances, they seek international funding to meet their climate objectives. This paper investigates Caribbean SIDS perspectives on the role of international climate finance in addressing climate change and its effectiveness in meeting climate goals. The paper first explored the climate financing needs of sixteen Caribbean SIDS through a content analysis of their Nationally Determined Contributions (NDCs). It then compares the climate finance needs of the region with international climate finance commitments received by examining climate finance trends using data from the Organization for Economic Cooperation and Development (OECD) Development Assistance Committee’s (DAC) Creditor Reporting System (CRS). The study revealed large gaps in estimating the climate finance needs of the region, as well as important patterns in the way climate finance is being distributed across mitigation, adaptation and overlap activity; principal versus significant climate objective; recipient country; sector; and source and type of funding. These findings are useful to help countries make decisions about how international climate finance should be used, and how its impacts should be evaluated and a basis for climate finance negotiations and dialogue with bilateral development partners and multilateral climate funds, and to assess whether available funds are being put to good use and identify problems that need to be addressed. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of flood management policies on airport investment and the resulting financial constraints. Specifically, it examines the effects of flood insurance, building codes, and public adaptation investment on the investment decisions of 100 United States airports located in flood-prone areas. The paper estimated the financial loss from extreme precipitations and flooding using novel data from the United States Federal Emergency Management Agency, and a differences-in-differences framework leveraging the introduction of the 2012 Biggert–Waters reform of the National Flood Insurance Program. The findings reveal that while flood insurance costs negatively influence overall airport investment, they do not significantly affect investment–cash sensitivity. On the other hand, the introduction of stricter building codes and public adaptation investment leads to increased cash usage for investment purposes, particularly among airports exposed to extreme precipitation and flood risks. Furthermore, the analysis suggests that the observed increase in financial constraints resulting from stricter building codes and public adaptation investment is likely driven by the asymmetry of information rather than the materiality of flood risk. In other words, public investment in flood risk reduction appears to signal to investors that the airport is exposed to flood risk, potentially leading to increased financial constraints. This finding highlights the importance of considering information asymmetry when assessing the impact of flood management policies on financial constraints. Understanding the underlying drivers of these effects is crucial for supporting resilient infrastructure development and informing effective decision-making in flood-prone areas. [ABSTRACT FROM AUTHOR]

Hydropower as a renewable source can help many countries achieve their sustainable energy and climate goals, but large projects are challenging to finance because of their costs and risks. To fully realize the climate benefits of such projects, sponsors have recently fashioned complex financing arrangements that structure and allocate risks to reduce financing costs. This paper focuses on the blended financing approach adopted for the Nachtigal Hydropower Plant (NHP) in Cameroon. The purpose of the paper is to present a detailed systems analysis of Nachtigal's financial arrangement to address the question of why the complex financing approach worked in practice. We accomplish this by creating a "financial simulator"—a computational model for evaluating risks and incentives embedded within the financing structure under different contract architectures and risk–event scenarios. Our simulator is a dynamic value–risk calculator that can be easily updated to study other climate-oriented projects that involve complex financial arrangements. We evaluated three aspects of the financing/contractual arrangements that made Nachtigal "bankable:" (i) guarantees that covered nonpayments, (ii) financial options on locally sourced loans; and (iii) an interest rate swap. We found: (i) the guarantees recovered project value threatened by four specific risks often associated with large hydropower investments (cost overruns, schedule delays, offtake risk, and low flow due to climate change); (ii) the mechanism significantly lowered interest rate charges; and (iii) private finance was mobilized—especially due to the options. The financial safeguards employed increased the likelihood of capturing the long-run sustainability benefits from NHP. [ABSTRACT FROM AUTHOR]

Governments and international organizations are increasingly using public funds to mobilize and leverage private finance for climate projects in the Global South. An important international organization in the effort to mobilize the private sector for financing climate mitigation and adaptation in the Global South is the Green Climate Fund (GCF). The GCF was established under the UNFCCC in 2010 and is the world's largest dedicated multilateral climate fund. The GCF differs from other intergovernmental institutions through its fund-wide inclusion of the private sector, ranging from project design and financing to project implementation. In this paper, we investigate private sector involvement in the GCF through a qualitative exploratory research approach. We ask two main questions: Do private sector projects deliver on their ambitious goals? What are the tensions, if any, between private sector engagement and other principles of the GCF (most importantly the principles of country ownership, mitigation/adaptation balance, transparency, and civil society participation)? This paper argues that private sector involvement does not provide an easy way out of the financial constraints of public climate financing. We show that the GCF fails to deliver on its ambitious goals in private sector engagement for a number of reasons. First, private sector interest in GCF projects is thus far underwhelming. Second, there are strong tradeoffs between private sector projects and the Global Partnership for Effective Development Co-operation (GPEDC) principles of country ownership, transparency, and civil society participation. Third, private sector involvement is creating a mitigation bias within the GCF portfolio. Fourth, while the private sector portfolio is good at channeling funds to particularly vulnerable countries, it does so mostly through large multi-country projects with weak country ownership. Fifth, there is a danger that private climate financing based on loans and equity might add to the debt burden of developing countries, destabilize financial markets, and further increase dependency on the Global North. The main problem of GCF private sector engagement is lack of interest from the private sector. For now, the GCF will strongly rely on public funds for its mission; thus establishing a strong track record of high impact climate projects should take priority over the promises of mobilizing private financial resources. Given the strong mitigation bias of private sector projects, public sector financing needs to be even more focused on climate adaptation. The GCF needs to ensure that the private sector's short-term interests in profitability do not undermine its own long-term goal of transformational change and development. The GCF needs to make sure that private sector projects are compatible with Global Partnership for Effective Development Co-operation (GPEDC) principles and its own rules on country ownership, transparency, and civil society participation. The GCF needs to pay more attention to building a sound institutional framework to ensure that climate finance does not add to the already existing debt burden, economic dependency, and financial instability of partner countries. [ABSTRACT FROM AUTHOR]

Sustainable Development Goal 13 echoes the fact that all countries must make urgent and stringent efforts to mitigate against and adapt to climate change and its associated impacts. Climate financing is one of the key mechanisms used to enable countries to remain resilient to the hastening effects of climate change. In this paper, we empirically assess the effect of institutional governance indicators on the amount of climate finance received by 21 nations for which progress towards the internationally agreed-upon target of reducing global warming to 1.5 °C is tracked. We use the fixed-effects ordinary least squares (OLS) and the feasible generalized least squares (FGLS) estimators, drawing on the Climate Action Tracker panel data from 2002 to 2020. Empirical results reveal that perceived political stability significantly enhanced climate finance inflows among countries that strongly increased their NDC targets, while perceived deterioration in corruption control negatively impacted the amount of climate finance received by the same group of countries. Therefore, governments should reduce corruption tendencies while striving to avoid practices and alliances that lead to any form of violence, including terrorism and civil war. Low developing countries (LDCs) in particular need to improve the standard of public services provided to the populace while maintaining a respectable level of autonomy from political influences. Above all, as countries work towards strengthening institutional governance, there is an urgent need for developed economies to assist developing economies in overcoming debt stress since the likelihood of future resilience and prosperity is being undermined by the debt crisis, with developing countries spending almost five times as much annually on repayment of debt as they allocate to climate adaptation. [ABSTRACT FROM AUTHOR]

This paper shows how green investing spurs companies to mitigate their carbon emissions by raising the cost of capital of the most carbon-intensive companies. Companies' emissions decrease when the wealth share of green investors and their sensitivity to climate externalities increase. We show that the impact of green investors primarily governs companies' long-run emissions. Companies are further incentivized to reduce their emissions when green investors anticipate tighter climate regulations and climate-related technological innovations. However, heightened uncertainty regarding future climate risks alleviates green investors' pressure on the cost of capital of companies and pushes them to increase their emissions. Calibrated on U.S. data, our model suggests that, albeit effective, the impact of green investors remains limited given their current wealth share and practices. This paper was accepted by George Serafeim, Special Section of Management Science on Business and Climate Change. Funding: This work was supported by the Europlace Institute of Finance. T. De Angelis received funding from the Engineering and Physical Sciences Research Council [Grant EP/R021201/1], and P. Tankov received funding from the Finance for Energy Markets research initiative of the Institut Europlace de Finance. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2022.4472. [ABSTRACT FROM AUTHOR]

This is a perspective, about the future climate policy of Pakistan, to improve the harvest of Green Climate Funds (GCF). This paper takes upon the calculation of climate financing potential in the context of the energy sector of Pakistan by estimating the potential of becoming a net-zero sector in Pakistan's Economy. The study has identified several options for the government to reallocate the energy mix and tie the energy demand targets with climate targets for a green future of Pakistan. The study has used basic excel tools to calculate facts from the available data sets in Pakistan. The study found that, if Pakistan chooses to shift from dirty sources of energy production to the use of cleaner inputs for energy production, Pakistan can generate a significant amount of climate finance by reducing the emissions from energy production, which are recordable, traceable, and can be evaluated by any of the third-party evaluating organization. The initial cost for Pakistan will cause some discrepancies in some of the macroeconomic indicators and may also cause budget imbalances it will surely help the economy to achieve the targets of becoming a net-zero economy and be able to harvest Green Climate Funds in long term with much faster rate, which can overpass the investments made or being made in this sector and will create a significant amount jobs in the economy, which will be green jobs, promoting environmental friendly output and sustainable growth. [ABSTRACT FROM AUTHOR]

This paper investigates household's private expenditures to cope with the harmful losses of climate change and disasters. Using household-level survey data from Bangladesh, this paper finds that disaster-affected rural Bangladeshi households allocate between $499 and $1076 in disaster-related expenditures. Such expenditures are always greater than their relevant precautionary savings, implying that those households may debt-finance their defensive measures. Households with greater precautionary savings spend more: a 100% increase in precautionary savings can increase disaster expenditures by 5%. Moreover, there are considerable regional heterogeneities in household's disaster expenditures. Increased public sector allocations in addition to carefully designed affordable market-based financing instruments can potentially ease the pressure on disaster-affected households in their fight against the harms of climate change and disaster. [ABSTRACT FROM AUTHOR]

The paper contributes towards filling a 'blind spot' in the field of climate finance by investigating the role of climate finance for behavioural insights in developing countries. The evidence review synthesises 71 high‐quality studies and focuses on clean fuel adoption and household energy‐saving behaviour in developing countries. The synthesis finds that there is a need for climate finance from developed countries that is more targeted towards interventions and measures that support household decision‐making in developing countries by engaging with stakeholders that understand local attitudes, constraints and knowledge levels governing the perception of health and environmental risks associated with energy‐consuming technologies. [ABSTRACT FROM AUTHOR]

Purpose: Green finance has shown the importance of being socially responsible and supporting the flow of financial instruments to develop environmentally sustainable and ethical business models. The growing trends raised the need for a quantitative study to address scientific performance analysis and intellectual development. This paper aims to cater quantitative statistics, through a bibliometric review to understand the vital intellectual and influential constitution of green and socially responsible finance. Design/methodology/approach: The authors apply trending and cutting-edge quali-quantitative approach of bibliometric citation analysis and review of 280 journal articles from the Web of Science database for the period of 1981–2021. Findings: The results identify the leading academic authors, journals, institutions and countries with relation to green and socially responsible finance literature. We also discuss three research streams in this field: (1) overview of green finance, perception and investor behavior; (2) analysis of performance models and growth factors of green finance; (3) pricing mechanism of SRI. Finally, we identify the research gaps within existing green finance literature, proposing 30 research questions for the future agenda. Research limitations/implications: The study confines on the Web of Science database, English published articles in known journals and reviews only. It relies on a reputable source and top scientific productions with the most direct link to green finance. Originality/value: To the best of the authors knowledge, this paper is the first to discuss research streams in the literature of Green finance from a bibliometric aspect along with vast coverage of articles from reputed journals and databases till date. The results of this research along with future research questions will guide the researchers and academicians to further explore and stand on solid quantitative basis regarding the scientific development of Green finance. [ABSTRACT FROM AUTHOR]

The Indonesian government has submitted its plan for nationally determined contributions (NDCs) to the United Nations and has committed to achieving net-zero emissions (NZEs) by 2060. While looking to reduce emissions from forestry, the government has prioritised a transition to renewable energy in the energy sector. However, Indonesia faces challenges owing to its lower-middle-income status, limited budgets and constraints in attracting international finance. This paper aims to assess Indonesia's potential for realising its energy transition goals. It evaluates the country's economic strength, past experiences in energy transition and the current status of ongoing initiatives. It concludes that significant progress is possible, but achieving NZEs by 2060 remains a major challenge. [ABSTRACT FROM AUTHOR]

This paper examines the essential financial instruments as the pillars of the climate resilience of the European Union. The research is based on qualitative methodology, i.e. the analysis of relevant policy documents, budgetary documents and legal sources, as well as the review of relevant literature. In order to emphasise the importance of the issue discussed, first of all the relevant terms and definitions such as climate risk and climate resilience are set out, and the whole issue of climate change is briefly outlined. After that, the two main sections of the article are structured as follows. First the role of the budgetary tools of the EU is discussed - including the latest facilities such as the 2021-2027MFF, NextGenerationEU and RRF. The second main point is established around the role of the central bank system - including the European Central Bank and the central banks of the member states - in climate resilience. The last chapter before the final discussion briefly sketches the experimental co-financing tools - mostly pilot projects - which are aimed at the energy efficiency of the infrastructure. [ABSTRACT FROM AUTHOR]

Recent literature suggests that direct national access to multilateral climate funds could promote climate change adaptation investment that focuses more on the needs of vulnerable local communities when compared to indirect access through multilateral agencies. However, there has been no systematic comparative assessment of the level of community focus of direct-access and indirect-access projects. The lack of a standardized methodology to assess the level of community-focused adaptation has also constrained such comparison. To address this gap, this paper proposes a new framework to assess the level of community focus in adaptation projects, using a combination of financial, participatory, devolutionary, and design for policy adoption and replicability criteria. Using the Adaptation Fund (AF) as a case study, we apply the framework to systematically assess 63 projects approved by the Fund as of May 2017, comprising 22 direct-access and 41 indirect-access projects. We find that direct-access projects are more community-focused than indirect-access projects because they exhibit higher community-oriented financial, participatory, and devolutionary characteristics. We find no difference between the direct-access and indirect-access projects with regard to how they are designed to promote policy adoption and replicability of AF project-financed adaptation actions through policy and geographical mainstreaming. Our findings contribute to an improved understanding of the pattern of adaptation investment that takes place in developing countries with the support of international adaptation finance under both access modalities. The proposed assessment framework could also inform the development of a standardized methodology to track the delivery of international adaptation finance to the community level. [ABSTRACT FROM AUTHOR]

Developing country case studies have thus far been under-represented in conceptual models attempting to theorize energy transitions. This paper explores the role of climate finance in the process of Madagascar's planned transition to renewable energy sources as envisioned in the country's New Energy Policy in order to demonstrate the different experience in developing countries when compared to hegemonic transition narratives. Drawing upon qualitative interviews with energy finance providers and focus groups in recently electrified rural communities, this paper reveals that Madagascar's transition is dependent on the financial resources mobilized by the government's technical and financial partners. Climate finance emerges as a critical lever to implement environmental legislation. The interview findings were correlated with census data to evaluate how current financing strategies are directly connected to energy justice issues, namely the equality in access to affordable and clean energy. Through an analysis of projected energy finance flows and key financiers' financing strategies, this paper exposes a shift from grant-based climate finance to financial instruments with clear return profiles, such as concessional loans and private capital, and finds that the choice of financial instrument impacts the provision of complementary social services in rural electrification schemes. Grants are linked to higher investments into complementary social services, while private financiers focus on innovation and scale. Purely private financed electrification projects were found to negatively impact social cohesion by increasing the inequality in access to energy. This study concludes that if only commercially viable energy projects were to be financed going forward, up to 19 million Madagascans might be excluded from future electrification efforts. Consequently, this paper urges researchers to consider social justice implications when evaluating climate finance strategies. [ABSTRACT FROM AUTHOR]

Background: This paper is related to the current stage of development in the Western Balkans. Despite becoming growing instruments to finance sustainable green development, debt swaps and social or sustainability bonds are relative novelties in this region. At the same time, the development needs are huge, especially in the light of the COVID-19 aftermath. Results: The review of both historic financial instruments, such as the debt for nature swaps, and more recent ones, such as sustainability bonds in its variations, highlight the potential for use in developing countries. The relatively recent case from Montenegro and the recent issuance of the green bond in Serbia showcase the possibilities. The focus of this paper is an analysis of the public debt position of Western Balkan countries. The growing level of public debt over the past decade points to a lack of adequate interventions and a relatively imminent need for fiscal consolidation. The research suggests that environmental, social, governance/sustainability-linked bonds and debt-for-climate swap investments as innovative financial instruments that hold promise in leveraging additional finance to support the sustainability goals of the six countries of the Western Balkans. This influx of capital would be particularly advantageous, given their needs relative to EU accession and their economic and structural challenges. The recommendations for policymakers are derived based on the history and features of green bonds as well as debt-for-nature swaps and their diverse underlying mechanisms which are adaptable to the respective countries. Conclusions: The related countries would benefit from exploring more innovative approaches to finance sustainable societies. In close cooperation with the EU and taking the European Green Deal into consideration, it is recommended that the six countries of the Western Balkans design financing mechanisms that will bring increased transparency to the different policies and more accountability for their implementation. Applying the recommended modality may help keep the problem of the public debt at bay, while additional funds may support implementation of structural reforms. [ABSTRACT FROM AUTHOR]

The private sector is one of the sources of finance included in developed countries' pledge in the UN climate negotiations to mobilise $100 billion annually by 2020 to support developing countries' efforts to address climate change. For adaptation in particular, it remains unclear what mobilised private finance is. Research so far has focused on its potential and experiences in developing countries, but not on the arguments of those who introduced and continue to advocate private adaptation finance: developed countries. This paper investigates the positions of developed countries and development banks and agencies. In particular, it aims to identify whether those actors can reach a common understanding of private adaptation finance that minimises norm conflicts in a fragmented climate finance system. Empirically, the paper examines the Biennial Reports and submissions on Strategies and Approaches for Mobilising Scaled-up Finance of six developed country parties, as well as data from interviews with experts from development banks and agencies. The analysis finds a number of discrepancies between these sets of actors, for example on motivations for and modes of private sector involvement. This discrepancy is the result of ambiguity around the concept of private adaptation finance in a highly fragmented climate finance architecture. This ambiguity is problematic when the aim of mobilising private adaptation finance is to contribute to the $100 billion commitment. However, if the aim is adaptation in practice, both ambiguity and fragmentation might actually make the climate finance system more inclusive and innovative. [ABSTRACT FROM AUTHOR]

Despite mitigation and adaptation efforts, the residual risks of climate change will continue to impact the most vulnerable communities globally. Highly exposed regions, such as the Pacific Islands, will continue to experience profound negative loss and damage as a result of climate change, which will challenge current ways of life. Knowledge on the extent to which regional and national climate change polices can identify and respond to non-economic loss and damage (NELD) is limited. From the perspectives of stakeholders in the Pacific Islands region, this research aims to gain insights into how regional and national policies are responding to NELD, as the well as the barriers, shortcomings, and requirements for future responses. Utilising a mixed qualitative–quantitative approach, this research explores the perspectives of expert informants, including those from the government, donors and development partners, civil society, intergovernmental organisations, and other relevant bodies, such as universities. The key findings of this study indicate that current policy responses include a regional policy that integrates disaster and climate change losses, national efforts to preserve traditional and local knowledge, national adaptation and resilience planning, community-based projects, and relocation and resettlement. Additionally, NELD is a relatively new concept for policymakers, practitioners, and researchers, and it is difficult to conceptualise the diversity of issues related to NELD in the region. Owing to this poor understanding, a key gap relates to the dominance of the economic lens when characterising climate-induced impacts in the region. As such, there is a limited holistic consideration of climate change impacts, and thus a limited appreciation of the interrelated factors of NELD within policy responses that then cascade towards communities. Finally, the paper outlines key policy insights as follows: policies on integration, adaptation, resilience planning, relocation and resettlement have advanced; the economic lens dominates when characterising climate-induced impacts on the region; there is a limited appreciation of the interrelated factors of NELD; and there exists a need to account for residual and intangible losses to land, culture, traditional knowledge, biodiversity, ecosystem services, and human agency. The insights gained from this research can provide a practical basis for guiding local to regional action and help support and design comprehensive risk management solutions in order to address NELD associated with climate change. [ABSTRACT FROM AUTHOR]

The COVID-19 pandemic has had many deep social and economic impacts that go beyond health issues. One consequence is that the pandemic has made it even harder to mobilize the financial resources needed to pursue SDG 13 (Climate Action) as a whole and to fund climate change mitigation and adaptation efforts in particular. This is especially acute in respect of the efforts to achieve the targets set by the Paris Agreement and by the recent decisions in Glasgow. This paper looks at how the COVID-19 pandemic has accelerated poverty and undermined climate change mitigation and adaptation efforts, as a result of the switches in priorities and funding. Using a review of the recent literature, an analysis of international trends, and a survey among climate scientists, it identifies some of the impacts of the pandemic on climate change mitigation and adaptation efforts and discusses their implications. The findings indicate a decrease in funding to climate change research since the pandemic crisis. The bibliometric analysis reveals that a greater emphasis has been placed on the relationship between COVID-19 and poverty when compared to the interrelations between COVID-19 and climate change. Addressing climate change is as urgent now as it was before the pandemic crisis started, and efforts need to be made to upkeep the levels of funding needed to support research in this field. [ABSTRACT FROM AUTHOR]

Climate change accelerates economic loss and results in negative GDP growth. Vulnerable geographies and communities are the most affected by climate change, but they lack the capacity (financial and technical) to withstand and adapt to its effects. In addition to this, the mismanagement of environmental resources for economic development has reduced the natural capacity of the ecosystem to adapt to climate change. In this regard ecosystem-based adaptation (EbA) measures can play a crucial role in building resilience to climate change in vulnerable communities. However, despite its importance, there is a significant shortfall of capital flows to adaptation, and specifically to EbA initiatives. There is a critical need to develop financing strategies which address challenges of traditional means of financing. This paper explores various innovative financing mechanisms and models to leverage adaptation finance and implement EbA measures for vulnerable communities through global case studies. In addition, the study seeks to provide pathways for adaptation finance that can be tailored to the priorities of local communities. [ABSTRACT FROM AUTHOR]

Climate justice is not just a financial transaction to protect the environment. It needs to be seen as the protection of the most vulnerable in society after centuries of resource exploitation. African countries disproportionately face impacts of climate change on their environments, their economies, their resources and their infrastructure. This leads to greater vulnerability and increased exposure to the negative effects of a changing climate. In this article, we highlight the importance of climate justice and its role within the United Nations negotiations, and ultimately in concrete action. We discuss current climate impacts across key sectors in the African region, with a focus on health, infrastructure, food and water scarcity, energy and finance. All sectors are affected by climate change. They are interconnected and under threat. This triggers a ripple effect, where threats in one sector have a knock-on effect on other sectors. We find that the current set of intergovernmental institutions have failed to adequately address climate justice. We also contend that a siloed approach to climate action has proven to be ineffective. As we head towards the next set of negotiations (COP27), this paper argues that the economic and social conditions in Africa can be addressed through financial and collaborative support for adaptation and localised solutions, but that this will only be achieved if climate justice is prioritised by the decision makers. This needs to include a global-scale transition in how climate finance is assessed and accessed. Climate justice underpins real, effective and sustainable solutions for climate action in Africa. [ABSTRACT FROM AUTHOR]

Global development institutions herald private finance as a key mechanism for limiting climate change. Many have concentrated their efforts on bridging urban “infrastructure gaps,” thereby creating profitable fixes and establishing new markets through global climate finance initiatives (GCFIs). This paper examines the project preparation practices of GCFIs in cities of the global South to understand how global climate finance anchors itself within cities. Leaning on the concept of financial ecologies, we argue that these practices do significant relational work, linking emerging smaller financial ecologies with each other, thereby establishing a larger financial ecology of climate urbanism. Examining the actors, spatial strategies and relations of these initiatives, we conclude that the sum of these parts ultimately serves the reproduction of global climate finance itself. [ABSTRACT FROM AUTHOR]

This contribution to the Reflections section of Ocean Yearbook devoted to the memory of the late Professor Meinhard Doelle concerns the options available to coastal States in their responses to global sea level rise driven by anthropogenic climate change. These reflections seek to explore the main policy options and practical approaches based on physical interventions in this context and to assess the possible risks as well as benefits of those approaches. They also explore some of the more radical and cutting-edge technologies which are already being deployed. While addressing the physical intervention options and some of their practical and legal implications, this paper also addresses the importance of environmental impact assessments (EIAs) and capacity-building, both of which were key themes in Meinhard Doelle's work. [ABSTRACT FROM AUTHOR]

This paper addresses the role performance information plays in the accountability regimes of international climate change financing institutions and how this can be improved. It has been argued that the quality of the performance information of projects financed by public and private sources, as well as how that information is used, influences decisions made by the various actors in the accountability regimes, including the ability to hold actors to account. A theory‐based framework is developed to analyze and enable the improvement of the information produced and used in climate finance accountability regimes. The framework is tested by applying it to the Green Climate Fund via document analysis and key informant interviews. With the help of the framework, gaps are identified, and improvements are suggested so that account holders and account givers can better fulfill their respective roles in the given accountability regime. [ABSTRACT FROM AUTHOR]

This perspective paper explores the potential of climate finance to support Caribbean Small Island Developing States (SIDS) efforts in achieving their Nationally Determined Contributions (NDCs) under the 2015 Paris Climate Agreement. Through a content analysis of sixteen Caribbean countries NDCs, it provides, first, a comprehensive overview of SIDS countries' perspectives on climate financing needs for mitigation and adaptation activities in meeting their climate targets. Second, the paper examines whether Caribbean SIDS acknowledge a role for domestic financing and international and domestic fiscal policy reform within their NDCs, as a way to address climate change mitigation and adaption. The analysis of Caribbean SIDS NDCs reveals that only eight countries provide clear cost estimates for mitigation activities, five for adaptation and one with a combined cost. This gives a total of US$51.3 billion for the combination of Caribbean countries across their NDCs. The majority of climate change activities identified in the NDCs are conditional on the provision of international climate finance. While some countries discuss domestic sources of finance, few note the need for domestic fiscal policy reform to counteract direct and underlying drivers of greenhouse gas emissions and their reduction. The findings suggest that, while much attention is directed to inadequate quantities of international climate finance, fiscal policy and the use of domestic finances are important for realizing transformative change and yet receive little attention from in-country policymakers. Caribbean SIDS suffer from a significant climate finance gap. Caribbean countries cannot remain dependent on international climate finance and must pursue more innovation and diversified options to achieve climate goals. Caribbean countries struggle to use domestic policy and investment options to align finance and incentives to promote their climate goals. The region faces challenges inherent in aligning domestic fiscal policies and other economic and regulatory incentives, as well as private sector investment, to complement and augment international climate finance objectives. [ABSTRACT FROM AUTHOR]

Climate change is arguably one of the biggest challenges globally. In order for countries to meet the commitments of the Paris Agreement, climate investments need to be scaled up for adaptation and mitigation strategies. Green bonds are one of the most emerging climate finance mechanisms for large-scale climate projects and offer investment opportunities for many developing countries. Most developing countries are heavily reliant on climate funds which are insufficient. Hence, the urgent need to tap into emerging climate finances such as green bonds. Out of all the regions, Africa is expected to be the worst impacted by climate change and green bonds can contribute to the much needed climate finances. The growth of the green bond market has been observed in the economic hubs of the continent with countries such as Kenya, Nigeria and South Africa demonstrating huge potential in being active and contributing to the growth of the market. However, this paper recommends that for the green bond market to further expand in these countries and rest of the continent, there needs to be public–private partnerships fostered, integrated policies, political will as well as effective institutional frameworks. [ABSTRACT FROM AUTHOR]

The Copenhagen and Paris Agreements, in which developed countries committed to mobilise USD 100 billion a year by 2020, indicate that climate finance will continue to grow. Even though economic development is not the aim of climate finance, climate-related disbursements will generate an economic impact on recipient countries’ economies. This impact will also reach other countries (including climate finance donors) through induced international trade. In this paper, we apply a structural decomposition analysis to study why the economic impact of climate finance varies between countries. We focus on specific climate actions and quantify the contribution of four drivers: value-added intensity, domestic multiplier, foreign multiplier and trade structure. The paper helps identifying the factors with the greatest potential to enhance the economic gains of climate finance in each country. This information can be useful for policy-makers trying to design national strategies that exploit the synergies between climate action and economic development. [ABSTRACT FROM PUBLISHER]

This paper puts forward a normative framework to differentiate between the climate-related responsibilities of different countries in the aftermath of the Paris Agreement. It offers reasons for applying the chief moral principles of ‘historical responsibility’ and ‘capacity’ to climate finance instead of climate change mitigation targets. This will (i) provide a normative basis to realize the goal of climate change mitigation while allowing for developing and newly industrialized countries to develop economically and (ii) offer an account of the distributive principles that can regulate climate finance. This is a real-world interpretation of the 1992 UNFCCC principle of ‘common but differentiated responsibilities’ that takes into account the progress accomplished at the COP21 in Paris and offers a solution to the still unsolved problem of differentiated responsibilities. This paper offers an application of this proposal to the Green Climate Fund. [ABSTRACT FROM AUTHOR]

This paper investigates the role of climate finance for hard-to-abate sectors in developing countries. It focuses on international transport, heavy industries and greenhouse gas removal technologies. The research is conducted in two parts: firstly, qualitative documentary-based secondary analysis through evidence reviews of the academic literature, landscape reviews of existing Funds in multilateral organisations, and legal reviews of OECD DAC Codes were undertaken to determine the degree of academic literature and practitioner activities on climate finance for hard-to-abate sectors, and the aid-eligibility of these groups of sectors; secondly, qualitative primary research is undertaken using the Delphi technique to identify the applicability of pull mechanisms previously undertaken for vaccine development to industrial decarbonisation in developing countries, analysing a case study of the applicability of an Advance Market Commitment (AMC) for cement decarbonisation in India. The outputs from the first part of the analysis produced a theoretical and conceptual framework for mapping the impacts of decarbonising hard-to-abate sectors against the Sustainable Development Goals and three common goals of climate finance-badged Official Development Assistance (ODA): economic development, poverty reduction and climate action. The paper finds that industrial decarbonisation is ODA-eligible, decarbonising international transport is only ODA-eligible in very specific applications in relation to poorer local communities surrounding airports and ports, and the theory of change for the ODA-eligibility of greenhouse gas removals is weak. The outputs from the second part of the analysis found that an AMC’s design needs to act as a large enough incentive (marked by the size of the funding committed to the AMC) and remain credible (through credible funding sources and transparent and trustworthy relationships between the actors involved), which are influenced by the type of actors involved, as well as their relationships, and that the process design needs to be tailored to the specific context of the industrial sub-sector and country. The paper argues for a greater role of pull mechanisms, such as AMCs, to address deep decarbonisation challenges in heavy industries in developing countries, and that (ODA-badged) climate finance can help to facilitate this.

Developing countries, including Small Island Developing States (SIDSs) and Least Developed Countries (LDCs), are exceptionally vulnerable to climate change due to their distinct geographical and environmental characteristics. Escalating sea levels and heightened salinity levels imperil freshwater reserves, while warmer ocean temperatures and acidification disrupt water demand, tourism, health services, and fisheries. Concurrently, these countries bear the brunt of water shortages, flooding, and declining water quality. However, significant barriers such as limited financing capacities to fund water security initiatives, exacerbated by a growing debt crisis marked by escalating interest rates and inflation, hinder developmental progress and investments in climate adaptation and mitigation endeavors. Consequently, there arises a critical necessity to harness innovative financial mechanisms to transform these debts into opportunities that support effective climate action. This paper explores the potential of debt-for-climate swaps as a catalyst for advancing transformative wastewater projects, focusing on their strategic deployment to underpin critical initiatives. Through case studies and empirical evidence, the paper elucidates how debt-for-climate swaps can enhance sustainable wastewater management systems in developing countries and delineates best practices for leveraging these mechanisms and the roles and responsibilities of key stakeholders, including governments, policymakers, the private sector, communities, and climate financial institutions. Combining theoretical insights with tangible examples, this paper furnishes a comprehensive framework for harnessing debt-for-climate swaps to enhance water security and resilience in developing countries. It offers actionable strategies for policymakers, practitioners, and stakeholders to navigate the complex terrain of climate change and engender sustainable development.

The paradigm of green finance is currently in the developmental stage in Bangladesh; however, it has drawn enormous interest in the global financial sector. Recently, researchers, academics, policymakers, and both the supply-side and demand-side of these funds are more serious in Green Finance and Sustainable Finance than ever before. In creating a greener economy, market players need to focus on sustainable development. All banks and NBFIs have to disburse the funded loan greater than or equal to 5% in green finance and 20% in sustainable finance according to BB policy guidelines. This paper examines the recent target accomplishment scenario of green finance and sustainable finance through banks and NBFIs in Bangladesh for the year of 2021 (four quarters). This study also observes the highest and lowest contributors in both schemes and is descriptive in nature. Data has been collected from secondary sources. According to the findings of this study, Bangladesh's central bank has made significant accomplishments in the effort to green the country's financial system by implementing several green policies and regulatory measures. This study also indicates the total target achievements of banks and NBFIs were 3.16% of 5% in the green finance of total loan disbursement and 9.32% of 20% in sustainable finance, which is still far behind the SDGs' goal that must be achieved by 2030. The intention of this research is to encourage the supply and demand sides of the fund and to capitalize more on future research directions. Independent experts in this field are needed to confirm the findings of any further research. [ABSTRACT FROM AUTHOR]

In this paper, we investigate the mean and volatility spillover between the price of green bonds and the price of renewable energy stocks using daily price series from 02/11/2011 to 31/08/2021. The unrestricted trivariate VAR-BEKK-GARCH model is employed to examine potential causality, mean, and volatility spillover effects from the green bond market to the renewable energy stock market and vice-versa. The results from the VAR-BEKK-GARCH model indicate that there exists a uni-directional Granger causality from renewable energy stock prices to green bond prices. While the price of green bonds is positively influenced by its own lagged values and the lagged values of renewable energy stock prices, only the past price value of renewable energy stocks has a positive effect on the current price value. We identified a uni-directional volatility spillover from renewable energy stock prices to green bond prices. However, there was no shock spillover from both sides of the market. This research shows that investors in the green bond market should always consider information from the renewable energy stock market because of the causal link between renewable energy stocks and green bonds. [ABSTRACT FROM AUTHOR]

Relying on complex interdependence as a theoretical approach, this paper investigates the hypothetical damage that the U.S. withdrawal from the Paris Agreement could represent for Africa in terms of climate finance. In June 2017, President Donald Trump publicly declared the U.S. intention to withdraw from further participating in the multilateral Paris Agreement. To keen followers and analysts of the U.S. climate policy beyond its borders, such unilateral action was never a surprise. Rather, it is nostalgic of the experience of the Kyoto Protocol, particularly how more or less similar move unduly prolonged the global climate negotiations up till late 2015 when the Paris Agreement came about. Although the Paris Agreement is remarkable as it represents the first states-wide climate deal, it however left a number of issues unresolved. Notable among which is climate finance which has remained the most contentious and of critical concern to developing countries, particularly in Africa. Pitted against the fact that Africa contributes less to climate change and, ironically, the hardest-hit by the phenomenon, the U.S. withdrawal from the Paris Agreement aggravates concerns around climate finance and, indeed, portends additional burdens for a continent that is still struggling to cope with the untoward fallout of climate change. [ABSTRACT FROM AUTHOR]

The experiences of overseas territories and how their varying degrees of self‐governance influence climate (in)action are overlooked topics, even though these places are often highly impacted by climate change. Analysing the situation of the Dutch Kingdom demonstrates some of these challenges. The Kingdom consists of the European Netherlands and the Caribbean islands of Aruba, Curacao, St Maarten, Bonaire, St Eustatius and Saba. Out of these, the Caribbean islands are the most vulnerable to climate change, while the European Netherlands has contributed the most to it. This can be seen as climate injustice. Access to mitigation and adaptation mechanisms mentioned in international agreements could be beneficial to these Caribbean islands. However, the international climate change agreements have only entered into force for the European part of the Kingdom and not the Caribbean part due to a territorial limitation. This has several consequences, and this paper highlights two. First, the requirement that greenhouse gas emissions should be reduced does not apply to the islands, which leaves room for unsustainable activities but also overlooks their need for adaptation and compensation for loss and damage. Second, access to climate finance instruments is limited as the Dutch Caribbean islands are seen as part of the Kingdom and therefore do not qualify for international assistance. Within the European Union, funds are available but access to these is not guaranteed, as the experience with recovery after Hurricane Irma demonstrates. These examples show that the issues around climate justice have been insufficiently resolved. There is a need for a long‐term climate strategy within the Kingdom along with complementary funding. Until then, climate litigation could assist in enforcing a duty of care by local governments and the Kingdom to protect inhabitants by using the human rights framework. This would also create a roadmap for other territories in similar circumstances. [ABSTRACT FROM AUTHOR]