Climate Finance Research Articles

Green Bonds as A New Investment Tool For Sustainable Development In India

The present paper conceptualizes the meaning, need and importance of green bonds as an initiative towards investment tool and sustainable development in India. A green bond is a type of investment that provides financial support for particular projects related to sustainability issue of climate change and control. Indian Companies have incorporated investment in green bonds as a part of climate finance strategy. The ICMA issued principles of green bonds investment and voluntary process guidelines for issuing green bonds in 2021. The four principles are: use of proceeds, process for project evaluation and selection, management of proceeds and reporting. The SEBI has issued several rules for green bonds securities in India including disclosure requirements, monitoring and third-party review. The private bank of India i.e. Yes bank was the first issuer of green bonds in India in the year 2015. Indian green bond issuance has grasped a total of $21 billion as on February 2023. The scenario of green bond market in India for the year 2021 shows that the Utilities sector has more share of green bonds followed by corporates, Renewable Energy sector and Financials. The least share is with local government in India.

Investigating the complex landscape of climate finance in least developed countries (LDCs)

This study aimed to investigate the complex landscape of climate finance, assessing the adequacy, predictability, and implications for sustainable development in least developed countries (LDCs). This study is motivated by the pressing need to assess the adequacy, predictability, and implications of climate finance for sustainable development in least developed countries (LDCs). Employing an econometric framework, this study utilizes ARIMA models to analyze time series data (from 2000 to 2021) on climate finance. The analysis revealed a notable gap between the needed and actual climate funding received by LDCs. Despite an annual requirement of $93.7 billion according to the UK-based International Institute for Environment and Development (IIED), LDCs have only received an average of $14.8 billion annually since 2015. The study suggests that climate funding for LDCs lacks predictability and falls short in meeting their needs, potentially facing an 80% decrease by 2030 under certain scenarios. It advocates for a strategic revamp in climate finance mechanisms to ensure adequacy and predictability, urging policymakers and international funding bodies to adopt more robust, fair, and needs-based approaches to climate financing. This research emphasizes the responsibility of developed nations and global agencies in bridging the considerable funding gap faced by LDCs. By integrating advanced forecasting techniques with a comprehensive analysis of global economic and political factors, this study sheds light on the challenges LDCs encounter in securing stable and sufficient climate finance, stressing the urgency for systemic reforms in global climate finance policies.

Exploring Climate Finance Initiatives: A Case Study of Indian Banks’ Role in Climate Development

Exploring Climate Finance Initiatives: A Case Study of Indian Banks’ Role in Climate Development

Financial Instruments of the Green Energy Transition: Research Landscape Analysis

In the conditions of worsening global energy problems, financial instruments play a key role in reforming the energy market. They provide the necessary financial resources for the development and implementation of environmentally friendly energy technologies, aimed at supporting projects that reduce the negative impact on the environment, and contribute to attracting private capital to finance environmentally friendly projects. The purpose of this study is to analyze trends in research on financial instruments of the green energy transition. The article carries out a comprehensive bibliometric analysis of scientific works devoted to the problem of financing the green energy transition. The object of the research is the publications indexed by the Scopus database for 1954-2023. Research tools are programs for bibliometric data analysis Vosviewer, SciVal and CiteSpace. Based on the trend analysis of publication activity on the issues of financing the green energy transition, the key role of the Paris Agreement of 2015 in the growth of interest in these issues has been proven. Visualization of the most used keywords in scientific works on green energy transition financing allowed us to identify four clusters of keywords that characterize the concepts of green energy transition: the concept of “green construction”, the concept of “green technologies and innovations”, the concept of renewable energy, and the concept of “green of finance”. Analysis of the frequency and number of citations of publications on green energy transition financing issues using the CiteSpace package made it possible to determine the TOP-17 keywords, highlight the period of their greatest citations, and carry out their clustering. Phrases most often used in publications include: finance, alternative economy, green bonds, green innovation, sustainable development, greenhouse gas emissions, sustainable finance, green credit, green economy, climate finance. Based on the analysis of relationships between keywords, seven clusters were identified: sustainable development, financing constraints, green bonds, green credit policy, green bonds, green economic growth, green economic recovery. The obtained results can be used by state institutions to improve financing strategies for green energy transition programs from the point of view of determining modern trends and key vectors of green finance development in the field of energy, analysis of the most effective financing tools, and identification of problems in the field of energy development.

Grappling with real property supremacy in US urban climate finance

In US cities, drives to secure property value against climate risks have become a preoccupation for mainstream climate finance. This real property bias sidelines non-owners and inhabitants of historically marginalized housing types, limiting their capacity to prepare for and recover from climate change events. In this intervention, we survey major pathways of existing climate finance, before turning to emerging trends for residential ‘climate-proofing,’ retrofitting efforts that bring climate finance ‘home’ to the building level. Building on the concept of ‘real property supremacy,’ we demonstrate how resourcing climate response is limited by the privileging of real property in the structure and distribution of low-carbon financial tools and incentives. We argue that this privileging reproduces hierarchies of protection for some, while exacerbating existing social inequalities, exclusions, and predations for others—ultimately, yielding greater control over climate futures to those with asymmetrical power over real property. This structurally unequal treatment risks locking-in extant social hierarchies embedded in US real property relationships instead of seizing opportunities to transform them via the historic urban investments required for climate change.

Loss & Damage Youth Grant-Making Council - a climate justice case study

ABSTRACT Climate justice has emerged as a key theme of the global climate crisis. It is widely agreed that significant funding is required to address climate challenges, but despite developed countries committing at the Paris COP meetings to providing US$100 billion annually, pledges and actual commitments have fallen well short of this goal. Moreover, the $100 billion annual commitment itself falls short of the US$6 trillion now estimated to be necessary for responding to the global climate challenge. Recently the discourse about climate justice has increasingly argued that this is a climate finance issue. This raises important questions about who will pay for mitigation and adaptation efforts undertaken by the countries that need it most – those at the forefront of the adverse impacts of climate change. Climate philanthropy offers an innovative way around this bottleneck, and is a promising vehicle of climate finance as it offers a range of financial and non-financial benefits. This article examines a case study of the Loss and Damage Youth Grant-making Council (LDYGC), a climate philanthropy initiative focused on engaging youth in responding to the climate crisis by providing grants through a competitive process.

Climate Diplomacy from a Neoclassical Realist Perspective: The Jordanian Model

This study aims to model Jordan’s climate diplomacy in light of neoclassical realism (NCR) theory as it uncovers how domestic and systemic factors shape Jordan’s multilevel strategy, in addition to testing the hypothesis that Jordan’s multilevel strategy combines local, institutional and national factors as part of its climate diplomacy. The data collected from various sources hypothesize that the multilevel climate response of small-income countries overlaps in a national and international way. The study found that Jordan’s act of internationalism is a systematic, long-term strategy that can play at various stages, and all levels have welded with one another in a spider’s web succession. Internationalism can be observed in Jordan’s active participation in mitigation-related activities through the Paris Agreement and the Green Climate Fund. NCR has proven to be a sound method to analyze the Jordanian case. The unique determinants and solutions for the case provide new ways to think about coping with climate change. At the same time, the central finding highlights the significance of future research on the role of domestic politics and external environmental conditions in shaping behaviour and in the international negotiations process in general. It contributes to the relevance of NCR in climate diplomacy. It expands its usefulness from the interest-based explanations of countries’ foreign policies in the international system to a broader scope of realism.

Newly evidence across the world on how climate financing helps in ensuring a greener future

Investing in climate change mitigation and adaptation has become a promising approach to address the negative impacts of climate change on the environment and to encourage efforts to adjust to changing conditions. Climate funding is a kind of foreign aid that seeks to reduce carbon dioxide emissions and promote ecologically sustainable economic development. However, it is not quite clear to what extent it helps recipient countries transition to low-carbon pathways. This research examines the worldwide flow of climate finance from 1999 to 2017 to determine the impact of climate funds on reducing carbon emissions and promoting sustainable development in recipient countries. The data suggest a potential correlation between climate funding and the reduction of carbon emissions, with investments in mitigation seeming to have a greater impact than spending on adaptation. Furthermore, countries that have achieved significant economic progress and Small Island developing states stand to benefit more from climate aid aimed at reducing emissions. This is due to the fact that both sorts of nations exhibit greater rates of economic growth. These results are significant for policymakers, who may use them to accelerate the transition to net-zero combustion levels and enhance environmental sustainability.

Future land use and land cover simulations with cellular automata-based artificial neural network: A case study over Delhi megacity (India)

According to United Nations projections, future global urban growth will mostly occur in Asian megacities. In this study, a Cellular Automata based Artificial Neural Network (CA-ANN) model is used to simulate the future land use and land cover (LULC) over Delhi megacity (India). Delhi, projected to become the world's most populated city by 2030, is an example of a data poor city in Asia, having millions of climate vulnerable people. The CA-ANN model of Modules for Land Change Simulation (MOLUSCE), an open-source plugin, is first tested to simulate the LULC for 2009. Based on good validation results-structural similarity (SSIM; 0.8288), overall accuracy (79.78 %), kappa index of agreement (KIA; 77.25 %), and minimum validation overall error (0.0379), the same model set-up is used to carry out LULC simulation for 2030. This model is found to be simple, efficient, and computationally less expensive tool, and can be used to model future LULCs with a minimal set of inputs, a constraint often found in data poor cities. Results show continued increase in built-up area from 38.3 % (2014) to 53.8 % (2030), at the expense of cultivable areas, forests, and wastelands. The study incorporates past and future LULC change trajectories to highlight the changing LULC dynamics of the megacity from 1977 to 2030. Rate of urban sprawl, calculated using compound annual growth rate (CAGR) is projected to be 2.51 % for 2014–2030, substantially higher than the estimates for 2006–2014 (0.62 %). Further, the past and future urban growth patterns for Delhi are found to mimic other big Asian cities. The database generated from the present study has wide applicability for scientific research community, governmental bodies, profit and non-profit organizations for topics concerning-future urban climate research, climate risk and adaption policy frameworks, climate finance budgeting, future town planning, etc.

Fintech Applications for Climate Finance and Sustainable Development

Fintech Applications for Climate Finance and Sustainable Development

Investing in Artificial Intelligence and Digital Health—What Radiology Innovators Need to Know

Expected to grow at a 5.5% compound annual growth rate and reach a market of $34.6 billion by 2028, the diagnostic radiology market is an innovation powerhouse, in significant part due to artificial intelligence and digital products. Many radiologists, researchers, technologists, and leaders possess the skills to develop cutting-edge innovations to improve patient care. However, invariably funding is needed to bring these innovations to fruition. Here we describe, from the vantage point of a practicing venture partner, the key considerations, criteria, and frameworks used when making decisions of what, when, and who to invest funding in. We also describe the current funding climate for these innovations.

DIGITALLY DRIVEN MODEL OF A CLIMATE-NEUTRAL ECONOMY IN TERMS OF GLOBAL FINANCIAL CAPACITY

The article explores the conditions and drivers for the development of a climate-neutral economy model, emphasizing the pivotal role of digital transformation. A crucial lever in deploying this model is the proactive engagement of international financial entities within the realm of global green financing. The study highlights the instrumental role of green funds as key players in shaping global financial capacity and providing multilateral support for climate change adaptation worldwide. It delves into the overarching frameworks and mechanisms of such assistance. Employing a systematic analysis alongside case studies of the Green Climate Fund's projects, the authors aim to identify the most impactful sectors for cultivating a climate-neutral economy. The research identifies four essential segments for achieving climate neutrality: digitalization for climate, strengthening the financial capacity and business sustainability, rethinking ecosystem development, and community empowerment. The investigation draws on extensive data regarding the execution of 240 climate projects across major beneficiaries of climate finance in Eastern Europe, Africa, the Asia-Pacific, and Latin America. It shows that modern climate finance demonstrates signs of geopolitical dependency and polarization in global influence. The findings argue for bolstering the regional presence of climate funds to increase the financial capacity to implement climate-neutral projects at the local level. The article underscores the scale of financial support required across each segment, as well as the leading role of pre-project preparation. The authors substantiate the overarching and twofold role of digitalization in the model of a climate-neutral economy. The digital transformation produces a whole cluster of independent and versatile IT products for green businesses, industries and governance. On the other hand, digitalization creates an informational environment and a powerful digital infrastructure for better efficacy of other crucial segments. Specifically, it provides digital decisions for financial solvency and sustainability of green businesses in terms of green lending, grants and Fintech; strengthens information awareness and involvement of vulnerable communities in green economy processes; promotes digital support for overall ecosystem adaptation.

Ethical And Moral Dimension of Climate Change; A Path to Climate Justice Case Study: Susan Bay’s Community, Freetown

2023 has been recorded as the hottest year ever. Sierra Leone is ranked among the 10% of countries that are prone and most vulnerable to climate impacts globally and Susan Bay is bearing the brunt of climate change impacts, including rising sea levels and flooding. Biodiversity is being impacted by human unethical behavior, wrong perceptions, and unhealthy activities. This has resulted to global surface temperatures reached 1.1°C. However, to address the situation UNESCO and COMEST proposed guidelines for Governments in their mitigation and adaptation strategies an ethical tool to achieve climate justice. An integrative review was employed to examine existing literatures. Also, key words were used to search popular databases, including Web of Science, Google Scholar, and PubMed, from the years 2010 to 2023 with a total of 53 articles. We argued that the most affected population should receive financial compensation from G20 countries responsible for majority of the Green House Gas Emissions. Therefore, the paper proposed for the Government of Sierra Leone to ensure policy regulation and enforcement, community development and empowerment, and community protection and resilience in their actions, missions, and visions from our analytical framework. The paper recommends for the GoSL to integrate ethical and moral values into climate mitigation and adaptation strategies, in line with UNESCO and COMEST recommendations with emphasis on: Prevention of harm; scientific integrity; and justice and equity. Inadequate financial resources and technical expertise hinders the GoSL in implementing these recommendations. To address these challenges, the study suggests that G20 nations should provide climate finance and scientific support to help the GoSL efficiently develop and execute its climate mitigation and adaptation strategies a path to climate justice.

Carbon offset funding in developing countries: challenges and rеspects

The article reveals the problems, prospects and contemporary mechanisms of carbon financing, the relevance of which is increasing in the face of new challenges associated with the development of reproductive processes in developing countries. At the same time, it is indicated that in some cases there are problems associated with the administration of business processes that ensure measurable emission reductions, which requires careful selection, monitoring and intergovernmental support for multilateral projects that contribute to the implementation of environmental protection and climate change programs. The article contains practical recommendations aimed at ensuring the economic interests of business entities based on the usage of additional financing mechanisms for development programs, including carbon emissions compensation, green bonds, carbon tax, climate funds, environmental certificates, etc. The conclusion is made about the expediency of using carbon financing mechanisms in business process that contribute to the cooperation between partner countries, accumulation of resources for project implementation, reduction of greenhouse gas emissions and sustainable economic growth of developing countries.

Where and how machine learning plays a role in climate finance research

ABSTRACT The financial sector, by mobilizing capital, is fundamental to adapt and mitigate the impact of climate change in the economy. This has led to the emergence of a new research field, climate finance, where experts are starting to harness Machine Learning (ML) as a tool to solve new problems, due to the need to use big datasets and to model complex non-linear relationships. We propose a review of the academic literature that goes beyond the existing bibliometric studies in the field, with the aim of identifying relevant application domains of this technology to inform ML experts where and how their modeling expertise may add value in climate finance. To achieve this, we first assemble a corpus of texts from three scientific databases and use Latent Dirichlet Allocation (LDA) for topic modeling, to uncover seven research areas which we label as: natural hazards, biodiversity, agricultural risk, carbon markets, energy economics, Environmental, Social and Governance (ESG) factors & investing, and climate data. Second, we perform an analysis of publication trends, which confirms that ML is growing both in breadth and depth in climate finance, in particular topics related to energy economics, ESG factors and climate data. Interestingly, some methods stand out in each area, based on data characteristics and modeling requirements.

Evaluation of Climate Change Mitigation Policies in Developed Vs Developing Countries

Purpose: The aim of the study was to analyzing the evaluation of climate change mitigation policies in developed vs developing countries. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The evaluation of climate change mitigation policies reveals distinct findings between developed and developing countries. Developed nations typically show higher levels of policy implementation and technological adoption aimed at reducing greenhouse gas emissions, resulting in measurable declines in carbon intensity across sectors. Unique Contribution to Theory, Practice and Policy: Environmental kuznets curve (EKC) theory, diffusion of innovations theory & dependency theory may be used to anchor future studies on evaluation of climate change mitigation policies in developed vs developing countries. Prioritizing capacity building initiatives and technology transfer programs in developing countries supports practical implementation of climate mitigation strategies. Advocating for equitable climate finance mechanisms ensures adequate funding and financial incentives for developing countries to implement climate mitigation actions.

Engage or retreat? Exploring the determinants of participation in Climate Finance public-private partnerships

Engage or retreat? Exploring the determinants of participation in Climate Finance public-private partnerships

Last mile delivery of climate adaptation in Uganda, the need to integrate and decentralize climate adaptation planning and implementation processes

ABSTRACT Millions of people in Uganda are in need of urgent climate adaptation. The current central government-led top-down projects are inefficient and ineffective. These projects financed by multi-lateral global climate funds have limited impact at community level. The Local Climate Living Adaptation facility (LoCAL) through its Performance-Based Climate Resilience Grants to local governments is much more efficient and effective. True last mile delivery of climate adaptation can be accomplished through the bottom-up District Development Planning process by assessing climate issues and capturing adaptation needs in village proposal sheets and turn them into Village Climate Adaptation Plans. To be able to rapidly provide locally led adaptation, systematically and continuously to the millions of people in need, integration of the three delivery mechanisms is proposed, where the millions of climate finance raised by the central government are channelled to district level as Performance-Based Climate Resilient Grants based on the adaptation needs captured in Village Climate Adaptation Plans.

Addressing the climate–finance interaction in a new light: From green to brown assets disclosure in the banking industry

AbstractThis paper explores the contribution of the banking industry to the decarbonization of the economy in the aftermath of the Paris Agreement. To this end, two complementary indicators are proposed: a carbon balance and a fossil fuel to equity ratio. The main novelty of these indicators is that, beyond traditional approaches in green finance, they take into account the parallel endeavor of banks in fossil fuel financing (so‐called “brown assets”). The results of the inquiry are presented in various maps and graphs. Both elements show that the bank‐induced process of decarbonization is lagging behind that of other industries, which creates a significant risk of financial instability. Changing this banking behavior necessarily involves a climate‐driven reform of the prudential rules on capital requirements; however, given the magnitude of the problem, this might not be enough. Nor is it the most urgent concern. Above all, what this paper makes clear is that the appropriate measurement and disclosure of financed emissions (both “green” and “brown”) is the first crucial step for the correct assessment of climate‐related risk and forms the basis for subsequent policy action.

The recovery and resilience facility as a new legal technology of European governance

ABSTRACT This article examines the innovative legal technology of European governance introduced by the Recovery & Resilience Facility (RRF) and its growing diffusion to a plurality of internal and external EU programs. It argues that the RRF created a new governance model, based on a 5-step process: definition of EU priorities, design of national plans, EU assessment of national plans, national implementation of the plans, and EU monitoring. Since 2021, the RRF legal technology has been replicated in a half dozen contexts – including RePowerEU, the EU Social Climate Fund, the Macro-Financial Assistance+ Instrument for Ukraine 2023, the Ukraine Facility and even the new Stability and Growth Pact. The RRF model has several legitimacy advantages, because it favors national ownership, while still endowing the EU institutions with significant leeway to shape national policy-making. Moreover, as a performance-based arrangement, it has effectiveness advantages too. Yet this model also has drawbacks worth exploring.