The international political economy of export credit agencies and the energy transition

Abstract

If the world is to achieve an energy transition to address climate change, global finance must shift rapidly away from fossil fuels and toward clean energy. Despite the prominence of global finance in International Political Economy (IPE), it is striking that one of the key institutions – export credit agencies (ECAs) – that provide a significantly larger volume of public investment in fossil fuels than multilateral financial institutions, such as the World Bank, has been largely overlooked in the literature. In this commentary, we argue that IPE scholars are well placed to lead research on the role of ECAs in the energy transition. Specifically, we consider ECA behaviour, such as lending decisions, to be the outcome of interest, and propose three possible sets of factors that are likely to shape ECA lending: Namely, domestic political economy factors, climate governance and international security. In doing so, we set out a research agenda for IPE in relation to ECAs by laying out a series of research questions and linking them to adjacent streams in the literature. This largely unexplored research agenda has great potential to expand not only our understanding of ECAs in IPE, but also the shape of the energy transition in the 21st century.