Members’ Contributions
2024
Aug 2024 | Frank van Gansbeke
Climate-triggered paradoxes yearning for remedial action at Jackson Hole
Central banks are, in finance parlance, sleeping beauties: admired for their financial firepower and feared for the impact they exert on global financial markets. Yet they have lost some of their lustre recently due to the length of time it took to contain inflation, as well as their conspicuous silence on the ways that climate change threatens financial stability.
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July 2024 | James Vaccaro
Achieving impactful sustainability policies that capture public and business enthusiasm remains a formidable challenge, as seen with past disappointments like the UK's Green Deal and Green Homes Grant. Despite significant technological advancements that have drastically reduced costs for sustainable solutions such as solar and energy storage, progress is hindered by policy responses that inadvertently encourage delay rather than immediate action. A proposed "Golden Rule" in policy design could incentivise timely adoption by consistently favouring present action over future expectations, thereby catalysing transformative momentum across sectors from energy to infrastructure.
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May 2024 | Aleksandar Simic, Rens van Tilburg and Frank van Gansbeke
The Green Peace Coin: How Green Currencies Can Help Address the Polycrisis
What do the wildfires in Texas and Canada, floods in Kenya and Brazil, debt crises in emerging economies and growing global unease with the dominant position of the US dollar have in common? It might just be their solution through monetary policy innovation. More specifically, a new reserve currency, backed by the global commons, could provide a way out of the present polycrisis of climate change-, biodiversity loss, and shifting geopolitical and financial tectonic plates.
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April 2024 | Dirk Schoenmaker and Rens van Tilburg
Price Stability Is All About Climate Change
Rising interest rates since 2022 are undermining the European Union’s transition to a greener energy system. In particular, renewable energy investment is highly sensitive to rising interest rates. In mid 2023, for example, a third of Dutch renewable energy producers were either delaying or cancelling investments because of rising rates.
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April 2024 | Marina Zucker-Marques, Kevin P. Gallagher, and Ulrich Volz
Defaulting on Development and Climate
The mission of the Debt Relief for Green and Inclusive Recovery (DRGR) Project is to utilize rigorous, policy-oriented research to advance innovative solutions to address the challenges of 21st century sovereign debt crises.
Taking a holistic approach, the DRGR Project engages with policymakers, thought leaders and civil society to further ambitious, evidence-based policy dialogue for sustainable development around the world. The DRGR Project has been designed since its inception with input from stakeholders in the Global South, and to advance its policy recommendations through a development-centered lens.
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April 2024 | Beyond Bretton Woods
Prepared in Conjunction with Middlebury Consulting Group, Aniketan Pelletier, Douae Loukili
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March 2024 | James Vaccaro
Closing the Financial Disclosure Loophole to Prevent “Emissions Laundering”
Finance can often have layers too. That’s why regulators need a way to look through the layers of financial intermediation to ensure meaningful transparency on risks through disclosure regulation.
Forming a true and fair view of climate-related risks for banks means peeling back every layer until the underlying activities are revealed, understood and accounted for. This is one of the most essential principles that should be enshrined in the current review of climate-related financial risk disclosures by the Basel Committee on Banking Supervision.
February 2024 | Rens van Tilburg, Aleksandar Simić and Sara Murawski
Limiting climate change and achieving Sustainable Development Goals in developing countries requires USD 3-4 trillion per year by 2030. That means commitments are needed to the field of Multilateral Development Banks, rechanneling Special Drawing Rights, global taxes and a debt pause. A discussion is needed on new issuances of Special Drawing Rights, expansion of the global safety net, democratizing global governance, debt contracts and a global carbon coin.
2023
December 2023 | Tirivangani Mutazu and Adrian Tanyaradzwa Chikowore
The International Monetary Fund (IMF) took a historical decision in August 2021 to allocate USD$650 billion worth of Special Drawing Rights (SDRs) to its member countries in response to the COVID-19 pandemic. African nations, home to 18% of the global population, received $33 billion in total, less than 5% of total SDRs allocated. These SDRs originate from an IMF decision to increase international reserve assets. They are not the result of financial gain or wealth creation but are created out of thin air. SDRs have few conditions attached and add nothing to a country’s debt. SDR allocations have significantly enhanced financial policy space in IMF member countries.
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December 2023 | Frank Van Gansbeke and Vinod Thomas
Moving the Needle on Decarbonizing Economies
In order to halt the trajectory of climate change, the single biggest task for the United Nations’ Conference of the Parties (COP28) in Dubai and beyond is to reverse the expansion of fossil fuels. Even as the global economy faces a “polycrisis,” it’s time to deal with the governance and policy causes of the failure to decarbonize.
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December 2023 | Vinod Thomas
Risk and Resilience in the Era of Climate Change
Raising the base of a house and mixing cement into its earth foundation make it less likely to collapse in a flood. Backup generators and pumping systems reduce the risk of power and water supplies failing, allowing hospitals to continue to operate. Robust health systems reduce the risk of disease following flooding. Education and communication systems can help people know when to stay home and when to seek higher ground. Functioning public services increase social trust, making it more likely that disaster response plans will be implemented successfully.
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November 2023 | Steve Waygood and Tom Taylor
The Tipping Point for Climate Finance
Make no mistake: climate risk is a huge financial risk. But the climate transition that can mitigate this is also a once-in-a-generation economic opportunity; when change happens, it is often faster than you ever thought possible.
We need to build on growing areas of momentum to achieve a just transition for the entire global economy. The implementation of transition plans from all actors, including governments and the bodies of the international financial architecture, can provide the nudge we need to cross the tipping points that will make the transition exponential.
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November 2023 | Frank Van Gansbeke
COP28: Troubling Paradoxes and a Plea for an Effective Reform Agenda
Towards the end of this month, more than 70,000 people will fly to the UN-sponsored Dubai-based Conference of Parties (COP28), the largest climate change convention on earth. The event’s objective is to gauge the progress of 196 nations on halving global greenhouse gas emissions by 2030, now an imperative as we hurtle towards catastrophic points of no return on our planet.
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November 2023 | Frank Van Gansbeke
Rethinking Bretton Woods — Looking Back to Address the Future (1/3)
Through a series of three articles, the 1944 Bretton Woods ambitions and edifices (US dollar as the global reserve currency, the IMF, and the Worldbank) are assessed through the lens of six distinctive global trends: the free market doctrine, the dollarization of the international market, globalization, the health and quality of life paradox, polarization, and the absence of a nature-centric paradigm. The observations will serve as a base for a Rethinking of Bretton Woods conference, post COP26, in 2022.
Rethinking Bretton Woods — Looking Back to Address the Future (2/3)
Rethinking Bretton Woods — Looking Back to Address the Future (3/3)
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September 2023 | Vinod Thomas
Overlapping Crises Could Fracture the Global Financial System
When the Titanic set sail in 1912, it was considered unsinkable because the hull was constructed as 16 watertight compartments. The ship would reportedly still float if up to four of these compartments were damaged. A similar assumption underpins today’s international financial architecture in the face of a polycrisis: runaway climate change, financial faultlines, the health pandemic, geopolitical dangers, the next generation of artificial intelligence and global water and food shortages.
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August 2023 | Ralph Chami, Connel Fullenkamp, Andres González Gómez, Nathalie Hilmi, and Nicolas E. Magud
The 2015 Paris Agreement requires all nations to combat climate change and to adapt to its effects. Countries promise to reduce their greenhouse gas (GHG) emissions through their Nationally Determined Contributions. Pledges to reduce emissions, however, have implications for economic growth. We estimate the link between economic growth and CO2 pollution levels and find that this relationship is highly non-linear. A country's GHG emissions rise rapidly as its economic activity rises, relative to global activity, meaning that fast-growing countries contribute most heavily to current GHG emissions. Then, using real per-capita GDP as our metric, we estimate how much the carbon price should be in order to remove the economic growth benefit from excess GHG emissions. We find that the implied prices are far higher than the prices on any existing market for emissions as well as estimates of the social cost of carbon. Our findings also have important implications for the global dialogue regarding responsibility for climate mitigation as well as for the choice of policies to support mitigation efforts.
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May 2023 | Sara Murawski and Rens van Tilburg
The global climate finance agenda in its current form is insufficient for tackling climate change and fostering a green transition across the globe. Calls to close the massive climate finance gap that prevents developing countries from accessing much-needed funds often rely on the expectation that domestic resource mobilization and blended finance can help close the gap. In this article, we demonstrate why this expectation seems wildly optimistic and argue that instead of relying on insecure trends, global policy makers should take action by developing policies that grant a bigger role for public money and innovative monetary solutions.
2022
December 2022 | Joseph Ingram
Are Corruption and Global Warming Two Sides of the Same Coin
The international community has to reflect on whether, as a condition of supporting the newly created ‘climate funds’ proposed at COP27, donor and recipient governments should be required to become members of the new International Anti-Corruption Court.
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May 2022 | James Vaccaro
Blip, Crisis or Collapse: Why Financial Regulators Need to Prepare for More Than a Climate Crisis
It’s now or never. That was the headline from the latest summary report from the IPCC describing the need for more urgent action. The “certainty” and “need for urgency” was already abundantly clear. What’s now emerging in the IPCC’s scientific analysis is the irreversibility of climate change – the devastating effects will continue for “centuries or millennia”, long after emissions stop.
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April 2022 | Ralph Chami
What a Living Whale is Worth — and Why the Economy Should Protect Nature
How much is one living blue whale worth in the fight against climate change? A lot more than you may think, says financial economist Ralph Chami. He explains the value of bringing the language of dollars and cents to conservation — and offers his vision of a new economy that would profit from regenerating nature, not extracting from it.
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Hubert Danso
Scaling Private Capital Mobilization
A call to action to heads of state, policymakers, and multilateral Development Bank officials
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Hubert Danso
Scaling Private Capital Mobilization
A letter to Heads of States as the plenipotentiary supreme shareholding governors of MDB‘s, to provide Climate Investment Statesmanship to immediately democratize investor access to the GEMs risk database to assist in ‘closing’ the financing gap in Emerging Markets and Developing Countries (EMDC’s).
2021
April 2021 | Delilah Rothenberg, Raphaele Chappe, and Amanda Feldman
ESG 2.0: Measuring & Managing Investor Risks Beyond the Enterprise-level
Do environmental, social, and governance (ESG) and impact investing practices in their current forms provide investors with sufficient tools to play a meaningful role in “Building Back Better” following the COVID-19 crisis? Many of our existing ESG and impact investing frameworks focus on issues at the portfolio company level, but they do not take into account potential negative impacts from capital structures and investors’ influence in shaping them. In this paper, the Predistribution Initiative (PDI) explores how the growth of institutional investors (asset owners and allocators) and certain asset allocation strategies can be in conflict with ESG objectives. The conflict materializes in various interconnected ways, particularly from institutional investors’ role in increasing global debt levels and fund manager and corporate consolidation, which in turn can create barriers for diverse fund managers and entrepreneurs, jeopardize quality jobs, erode the quality and affordability of goods and services, increase asset class correlations, reduce diversification opportunities, and ultimately fuel economic inequality and market instability. For long-term, diversified institutional investors, or “Universal Owners” of the market, these dynamics eventually translate into lower financial returns. For workers and communities, these dynamics translate into greater precarity and inequality.
February 2024 | Rens van Tilburg, Aleksandar Simić and Sara Murawski
Limiting climate change and achieving Sustainable Development Goals in developing countries requires USD 3-4 trillion per year by 2030. That means commitments are needed to the field of Multilateral Development Banks, rechanneling Special Drawing Rights, global taxes and a debt pause. A discussion is needed on new issuances of Special Drawing Rights, expansion of the global safety net, democratizing global governance, debt contracts and a global carbon coin.
December 2023 | Tirivangani Mutazu and Adrian Tanyaradzwa Chikowore
The International Monetary Fund (IMF) took a historical decision in August 2021 to allocate USD$650 billion worth of Special Drawing Rights (SDRs) to its member countries in response to the COVID-19 pandemic. African nations, home to 18% of the global population, received $33 billion in total, less than 5% of total SDRs allocated. These SDRs originate from an IMF decision to increase international reserve assets. They are not the result of financial gain or wealth creation but are created out of thin air. SDRs have few conditions attached and add nothing to a country’s debt. SDR allocations have significantly enhanced financial policy space in IMF member countries.