January 13, 2025 | Working Paper
  • Type of publication: Working Paper
  • Research or In The Media: Research
  • Research Area: Finance, Jobs & Macroeconomics
  • Publication Date: 2025-01-13
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  • Authors:
    • Add Authors: Ramaa Vasudevan
  • Show in Front Page Modules: Yes

This paper was presented as part of the "Sovereign Debt and Climate Finance Conference” at PERI, May 2024

Abstract

We present a framework to assess green climate finance and the pathways to building a climate aligned financial system. This would involve the strategic reorientation of central bank interventions, national development banks and multilateral and regional banks and coherent purposive collaborations between these institutions and interventions to decisively reshape the contemporary global financial system that is out of tune with the long-term imperatives of climate action. Aligning finance to climate goals at the necessary scale, pace and direction requires the calibration of financial flows across three axes: ‘public-private’; ‘real-financial’ and ‘national-international’. Along the first axis the nature-depleting, climate imperiling logic of short-term private profitability needs to be contained in order to pursue the public priorities of climate action. Along the second axis, policy efforts have to be geared to ensuring that financial flows are financing investments in climate mitigation and adaptation and not simply providing more fodder for the global portfolio glut and financial accumulation. Finally, along the third axis warding global funding and support on appropriate terms has to be provided to the most vulnerable countries while buttressing national ownership of the green mission.

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