Climate Finance Research Articles

Scaling Up Private Sector Financing for Climate Change Adaptation in Zimbabwe: A Brief Literature Review

Developing countries such as Zimbabwe that are highly vulnerable to climate change, are struggling to close the funding gap for climate change adaptation largely due to constrained fiscal space, and also the inadequate climate finance flows from developed countries. This article reviews the existing literature relevant to closing the climate finance gap in Zimbabwe through scaling up funding from the private sector funding. The literature shows that current private sector flows for climate finance are far below what is required to meet the needs of the country. The paper presents literature review findings, and also identifies solutions for unlocking more domestic private sector finance for climate change adaptation. The findings of the study contribute towards informing government policy on climate change particularly with regards to the mobilization of additional finance.

Determinants of Global Banks’ Climate Information Disclosure with the Moderating Effect of Shareholder Litigation Risk

This paper explores the influence of a country’s institutional factors and internal corporate governance on banks’ voluntary climate finance disclosures. The analysis focuses on the world’s top 100 banks, examining the institutional and governance factors that shape TCFD disclosure practices. From an institutional perspective, the research reveals a heightened level of climate financial disclosure in banks located in countries where investor protection is strong under the common law system and environmental performance is commendable. On the internal governance front, it is observed that the independence and diversity of the board of directors play a facilitating role in promoting such disclosure. Additionally, in countries where shareholder litigation is easily pursued, a moderating effect is observed wherein board independence paradoxically inhibits TCFD disclosure. This study stands as the first to explore the determinants of climate financial disclosure in global banks, confirming the driving forces behind such disclosures through institutional and stakeholder theories and providing crucial empirical evidence to enhance research on voluntary disclosure.

Bonding out the future: Tracing the politics of urban climate finance in Miami, Florida

ABSTRACT Over the past decade, city governments have increasingly turned to financial markets to help pay for elements of their resilience plans. The techno-utopian zeal of the plans and related financing mechanisms has led some scholars to read both as diagnostic of the “post-political” urban condition. This paper engages these concerns through the case of the Miami Forever Bond, a novel $400 million bond that pays for an initial round of resilient infrastructure in Miami, Florida. Bringing social studies of finance and racial capitalism scholarship to bear on the case, I argue that the bond helps constitute and formalize a terrain of struggle over the city’s future and its longstanding “infrastructural investments in whiteness.” The case thus belies a straightforward reading of urban climate finance as diagnostic of the post-political urban condition. It also points to a need to revisit prominent modes of inquiry on, and recognition of, the politics of urban climate finance. Thus, in the conclusion I reflect on how the approach developed here can be used to (1) analyze actually existing urban politics as they increasingly transpire under the banner of climate finance and (2) aid in growing scholarly calls to pinpoint possibilities for climate-linked repair.

The impact of the climate crisis on gender inequality. Looking to the frontlines in search of priorities for policy

The climate crisis disproportionately impacts women and girls all over the world. To understand what the priorities in terms of policy are, an examination is conducted on the impacts taking place in South Asia (focusing on the countries of Bangladesh, India, and Pakistan), an area of the globe that is highly vulnerable to climate change and is characterized by having strong patriarchal values. Gender stereotypes and roles in the region heighten women and girls' vulnerability to climate impacts, both in general and in situations of crisis resulting from extreme weather events. Deepening the understanding of the climate crisis' impact on gender in South Asia, a region at the frontline of these effects, can assist in reaching a baseline understanding of the challenge from a global perspective. Methodologically, we reviewed an extensive body of literature, both specialty books and scientific articles, recent institutional reports as well as news or journalistic reports from reliable international press. In this research, the argument is made that today, climate action and urban development cannot be considered separately from women's rights. Extensive scientific data and research support the integration of a gender perspective in urban adaptation standard practices, and priorities in terms of policy to safeguard women and girls are identified accordingly. The allocation of half of climate funds, including those of loss and damage, directly to women or women-led organizations is identified as being particularly relevant. Bold and ambitious policymaking is urgently needed to build capacity to face the multiple crises unfolding.

Assessment of Climate Change Financing Mechanisms in Cameroon: A Comprehensive Review

Climate change is a development challenge, particularly for developing countries like Cameroon, characterised by heightened vulnerability due to socio-economic structures and reliance on climate-sensitive sectors. Mitigation and adaptation measures are imperative, making financing mechanisms a central focus of international cooperation. This review examines the intricate landscape of climate change financing in Cameroon, providing an in-depth understanding of existing mechanisms, their effectiveness, and the challenges hampering optimal implementation. The study scrutinizes diverse funding sources, encompassing international climate funds, bilateral agreements, and national budget allocations. Key challenges, including fragmented approaches, accessibility issues, and alignment with national development goals, are identified. The study underscores the critical importance of coordination, capacity building, and strategic alignment in navigating the complex climate financing landscape. By systematically addressing these challenges, Cameroon can enhance the utilization of climate finance, ensuring tangible benefits for local communities and substantial contributions to sustainable development goals.

Группа наименее развитых стран (НРС) в международной климатической политике

Global climate change is one of the main challenges of our time. Rising temperatures threaten the stability of the ecological, socio-economic, and political systems around the globe. Countries in the Global South have the greatest material losses from climate change without having a significant impact on it. The high vulnerability of the group of least developed countries (LDCs) to climate change, coupled with social and economic challenges poverty, and lack of means for adaptation, determine its special rank and status in international climate policy. In it, the LDCs act as a single actor. Over the course of more than 30 years of climate policy, LDCs have initiated the adoption of a number of important documents and the creation of fundamental structures for international climate policy. At the same time, noticeable transformations have taken place to adapt and decarbonize the national structures of LDCs. The purpose of this article is to show the role of the LDC group in the formation of the United Nations (UN) climate agenda, institutional structures, and international mechanisms, to highlight their efforts to restore global climate justice, and to characterize modern national climate policy according to the legal documents adopted by the LDCs. The methodological basis is formed by historical, comparative approaches. The main objective of the article is to study the trajectories of the climate policy of the LDC group, highlight the stages of its evolution, demonstrate centre-peripheral relations to restore climate justice, and examine the internal policies of the LDCs. Policy initiatives of the LDCs played a direct role in the formation of climate finance funds, the group of experts on the least developed countries (LEG), and national programmes and plans for the adaptation of states to climate change. The article concludes that there are two stages in the development of climate policy in LDCs; it is assumed that the use of international mechanisms for adaptation and decarbonization could become a tool for the economic and technological modernization of LDCs and their achievement of the sustainable development goals of 2030. The main obstacles to this are the insufficient financing of available funds from countries of the Global North, high interest rates on loans, and the indebtedness of LDCs.

Pension funds and fossil fuel phase-out: historical developments and limitations of pension climate strategies

Despite the decades of international climate negotiations and several landmark agreements, global efforts to date to restrict fossil fuel production in line with climate targets have been unsuccessful. As national and international policies continue to fall short of phasing out fossil fuels, increasing attention has been paid to non-state actors, like pension funds, as a potential source of more ambitious climate action. As major asset owners, large shareholders in fossil fuel companies, and historically activist investors, pension funds are theoretically well-placed to contribute to phasing out fossil fuels. Despite growing recognition of this potential role for pension funds and other major investors in climate change mitigation, there has been little attention to pension funds’ historical record on climate change, or to how their climate strategies have developed and changed over time. This paper examines how the climate strategies of the largest US and European pension funds have evolved in relation to key developments in international climate agreements and the extent to which these strategies contribute to restricting fossil fuel supply. Through an analysis of the annual, governance, and sustainability reports of 6 pension funds from 1997 to 2022, we examine the strategies pension funds have adopted to address both climate change and fossil fuels. Pension funds have demonstrated responsiveness to the signals of international climate agreements, adopting a range of strategies with respect to climate change (amongst others, integrating ESG principles, increasing their sustainable investments, and setting net zero goals). Their explicit attention to fossil fuels and contribution to supply-side interventions take the form of systematic shareholder engagement, (selective) divestment, and lobbying policymakers. While pension fund climate action is growing , the ambition of their strategies is not aligned with a rapid fossil fuel phaseout; their efforts are often focussed on improving disclosure and transparency and demonstrate complacency with minimal improvements from fossil fuel companies. If pension funds are to significantly contribute to phasing out fossil fuels, redefining pension fund responsibilities and the traditional shareholder role will likely be required.

Unveiling The Nexus: Exploring the Impact of Behavioral Finance on Green Finance Initiatives

This research paper delves into the dynamic landscape of global climate finance during the fiscal years of 2021/2022, examining the collaborative efforts of public and private actors in addressing the multifaceted challenges posed by climate change. The equitable distribution of financial resources reflects a shared commitment to transformative action, with a focus on critical sectors such as energy, transport, and buildings and infrastructure. Both sectors emphasize the transition to renewable energy, sustainable transportation, and climate-resilient urban development. Public finance plays a pivotal role by directing support to relatively underserved sectors, including Agriculture, Forestry, and Other Land Use (AFOLU), water and wastewater management, and industry. This targeted intervention ensures inclusivity in climate action and contributes to broader sustainable development goals. The financial commitments not only reduce carbon footprints but also foster innovation, job creation, and economic resilience. The collaborative model of climate finance observed during this period sets a precedent for future endeavors, emphasizing a holistic and inclusive approach. The research suggests potential avenues for future studies, such as assessing the long-term impact of climate finance, evaluating evolving patterns in public-private collaboration, and exploring the integration of climate finance within global policy frameworks. Ultimately, this research contributes to the ongoing discourse on climate resilience, offering insights into the interconnectedness of financial commitments, sustainable development, and the global fight against climate change.

Predictive analytics in climate finance: Assessing risks and opportunities for investors

Predictive analytics is increasingly recognized as a pivotal tool in climate finance, offering investors invaluable insights into both the risks posed by climate change and the opportunities for sustainable investment. This Review delves into the burgeoning field of predictive analytics within climate finance, emphasizing its significance in aiding investors to navigate the multifaceted landscape of climate-related risks and opportunities. By leveraging advanced data analytics techniques, predictive analytics empowers investors to anticipate and mitigate climate-related risks, ranging from physical risks such as extreme weather events and sea-level rise to transition risks associated with regulatory changes and technological shifts. Moreover, predictive analytics enables investors to identify emerging opportunities in sectors poised for sustainable growth, such as renewable energy, clean technology, and climate resilient infrastructure. This Review also sheds light on the methodologies and data sources utilized in predictive analytics for climate finance, encompassing climate models, satellite imagery, socioeconomic indicators, and financial data. Through the analysis of historical trends and future projections, predictive analytics provides investors with actionable insights to inform their investment decisions and align their portfolios with climate-related goals and mandates. Despite its potential benefits, the adoption of predictive analytics in climate finance is not without challenges. This Review examines the hurdles associated with data quality, model uncertainty, regulatory complexities, and the integration of climate-related factors into financial decision-making processes. Addressing these challenges necessitates interdisciplinary collaboration, robust risk assessment frameworks, and ongoing innovation in predictive analytics methodologies. In conclusion, this Review underscores the critical role of predictive analytics in climate finance and its transformative potential in enhancing the resilience and sustainability of investment portfolios. By harnessing the power of data-driven insights, investors can proactively manage climate-related risks, capitalize on sustainable investment opportunities, and contribute to the transition towards a low-carbon economy. As climate change continues to exert profound impacts on financial markets, the integration of predictive analytics represents a strategic imperative for investors seeking to navigate the evolving landscape of climate finance effectively.

International climate finance mechanisms: A review with focus on Africa

Climate change poses an unprecedented threat to the global environment, with far-reaching consequences for vulnerable regions, particularly in Africa. This paper provides a comprehensive review of international climate finance mechanisms, shedding light on their effectiveness in addressing climate-related challenges, with a specific focus on the African continent. As climate change continues to exacerbate existing vulnerabilities, understanding and optimizing the mechanisms through which financial support is channeled to affected regions becomes paramount. The paper explores a range of international climate finance mechanisms, including multilateral funds, bilateral agreements, and private sector initiatives. It assesses their strengths and weaknesses in terms of mobilizing resources, promoting sustainable development, and enhancing climate resilience. The analysis also delves into the evolving landscape of climate finance, considering the emerging role of innovative financial instruments and the potential for leveraging private sector investments to complement public funding. Focusing on Africa, the review examines the unique challenges faced by the continent, such as extreme weather events, water scarcity, and agricultural disruptions. It assesses the suitability and impact of existing climate finance mechanisms in addressing these challenges and supporting Africa's adaptation and mitigation efforts. The study also considers the effectiveness of capacity-building initiatives to enhance the ability of African nations to access and utilize climate finance resources efficiently. Furthermore, the paper highlights the need for enhanced transparency, accountability, and governance in the disbursement and utilization of climate finance in Africa. It emphasizes the importance of inclusive and participatory approaches that engage local communities and ensure that climate finance contributes to sustainable development goals while addressing the specific needs of the most vulnerable populations. This review provides a nuanced understanding of international climate finance mechanisms, offering insights into their application and impact in the context of Africa's unique climate challenges. By identifying opportunities for improvement and addressing existing gaps, the paper aims to contribute to the ongoing discourse on optimizing climate finance for a more resilient and sustainable future.

Green bonds in climate finance: A review of USA and African initiatives

Green Bonds have emerged as a pivotal instrument in climate finance, facilitating the transition towards a sustainable and low-carbon economy. This paper provides a comprehensive review of Green Bond initiatives in both the United States and Africa, shedding light on the distinct trajectories, challenges, and opportunities within these regions. In the United States, Green Bonds have gained substantial traction as a financial mechanism to support environmentally friendly projects. The review explores the regulatory framework, market dynamics, and the role of key stakeholders in shaping the landscape of Green Bonds in the U.S. The analysis delves into the impact of policy developments, such as the Biden administration's commitment to climate action, on the growth and diversification of Green Bond issuance. Additionally, it examines the investor perspective and the evolving disclosure standards that contribute to the transparency and credibility of these financial instruments. On the African continent, Green Bonds have emerged as a critical tool for mobilizing capital to address climate-related challenges while promoting sustainable development. The paper highlights the unique challenges faced by African nations, including limited financial infrastructure and the need for capacity building. It discusses the role of international partnerships and multilateral institutions in supporting African countries in their endeavors to issue Green Bonds. The review also explores how these financial instruments contribute to the continent's broader climate resilience and mitigation strategies. Furthermore, the paper emphasizes the importance of aligning Green Bond initiatives with broader sustainable development goals, ensuring that the financing mechanisms not only address climate change but also contribute to social and economic development. It discusses the potential for innovation in structuring Green Bonds to attract diverse investors and foster inclusivity in climate finance. This paper provides a nuanced overview of Green Bond initiatives in the United States and Africa, offering insights into the diverse strategies employed, challenges faced, and the broader implications for climate finance. The comparative analysis aims to inform policymakers, investors, and stakeholders, fostering a deeper understanding of the evolving landscape of Green Bonds in these distinct yet interconnected regions.

UNFCCC: A Feminist Perspective

The United Nations Framework Convention on Climate Change (UNFCCC) was the only multilateral environmental agreement to emerge from the Earth Summit in 1992 which did not include any references to gender. Recognition of gender within the UNFCCC has been exceedingly slow and largely tokenistic with a focus on ensuring ‘gender balance’ within UNFCCC meetings and processes. This article explores the emergence of gender language within the UNFCCC by reflecting upon: where we have come from; where we are now; and where we are going with respect with gender. While there was very little progress in the early days of the UNFCCC, this article shows that from 2001 onwards there have been a series of small gains, which will be explained and critique. Much work remains to be done with this paper suggesting some concrete steps such as hosting a Gender COP, ensuring financing for National Climate Change Gender Focal Points and embedding gender meaningfully within existing climate finance processes. In recommending future actions, the paper draws on insights from the Pacific and Australian experience.

Islamic green finance: mapping the climate funding landscape in Indonesia

Purpose This study aims to explore the potential of Islamic climate finance in Indonesia and to map Islamic climate finance based on Islamic finance instruments, both commercial and social. Design/methodology/approach The analysis was conducted in Jakarta, Indonesia, between October 2022 and June 2023. This study adopted a qualitative interpretive approach in two phases. The first phase was desk-based research which focused on document analysis such as official documents, scientific publications, non-governmental organization publications and company reports in Indonesia. This analysis was conducted to identify significant milestones in developing green and eco-friendly finance that used Islamic financial instruments in Indonesia. The second phase consisted of interviews with essential Islamic climate finance project actors, such as green sukuk publishers, zakat and waqf collection agencies, stakeholders, capital market regulators, Shariah supervisory boards and Islamic finance experts. Findings The main finding of this study is that the development of Islamic green finance in Indonesia can occur through various channels, including greening Islamic capital markets, greening Islamic social finance, Islamic green finance and developing green banking services for the unbanked to support financial inclusion. Green sukuk, or Islamic bonds, are key financial instruments in Islamic green finance. They are used to fund projects in areas such as clean energy, mass transit, water conservation, forestry and low-carbon technology. These green financing initiatives also include socially responsible investments that are designed to improve the lives of people and communities. Research limitations/implications First, the availability of data on Islamic green finance practices in Indonesia may be limited, making it difficult to obtain a comprehensive understanding of the current landscape. Second, cultural and religious factors may play a role in the adoption and implementation of Islamic green finance, and these factors may vary across different regions in Indonesia. Practical implications The exploration and clustering of Islamic climate finance based on Islamic financial instruments in Indonesia can lead to the development of more sustainable and environmentally friendly practices in the financial industry. Originality/value This study serves as a pioneering effort to explore the potential and clustering of Islamic climate finance based on Islamic financial instruments in Indonesia.

Funding Climate Change Initiatives: Utilising the Law for Enhancing Financial Management in Cities

Climate change affects cities disproportionately, and some cities have limited fiscal capacity to address climate change. It is therefore necessary to ensure that the climate funds cities do have at their disposal are used in a way that maximises their impact. However, financial mismanagement and corruption have led to significant money losses in climate funds. Although measures against general public sector corruption can be used to improve climate finance management, the climate finance market poses some unique challenges. Traditional anti-corruption measures can be rethought to maintain their effectiveness against corruption in climate finance. Against this background, the article explores how international and regional law can be used by cities to improve the management of climate funds. Eight financial controls are identified and critically discussed to show how they can be effective in the specific case of climate finance. The article also shows some examples of where these financial controls have been implemented in cities

A Comprehensive Review of Climatic Threats and Adaptation of Marine Biodiversity

Oceans play a vital role in socioeconomic and environmental development by supporting activities such as tourism, recreation, and food provision while providing important ecosystem services. However, concerns have been raised about the threat that climate change poses to the functions of oceans. This study examines the impacts, threats, and adaptation strategies of climate change and marine biodiversity. Using bibliometric and secondary data analysis, this study determines that climate change leads to rising sea temperatures, marine heatwaves, acidification, and increasing sea levels. These factors undermine the significance of ocean ecosystem services. This study also identifies the significant risks posed by climate change to marine species diversity and distribution, primarily through habitat degradation and shifts in species ranges. Scholarly focus on these challenges has grown over time, focusing on adaptation strategies and building resilience to mitigate adverse impacts. This study critically evaluates various adaptation measures, including nature-based and human-based solutions such as habitat restoration, policy and legislative frameworks, and their potential to protect marine ecosystems. It provides detailed discussions on the effectiveness of adaptation strategies such as marine protected areas (MPAs), mangrove and coral reef restoration, and species range shifts. This review also emphasises the significance of indigenous knowledge systems and community participation in marine conservation efforts to achieve holistic and sustainable management. It highlights the need for enhanced international cooperation and a transdisciplinary approach to address the complex interplay between climate change and marine biodiversity. Additionally, this study suggests that funding for research gaps and conservation can be secured through tourism revenue and other climate funding mechanisms.

Using climate financing wisely to address multiple crises

A convergence of several risk drivers creates the compound crises we see across the globe today. At the same time, the global humanitarian community and national institutions in affected countries are increasingly resource constrained. In this context, existing financing mechanisms should be evaluated for their potential to create synergies between social protection, peace, and inclusion objectives on the one hand and climate resilience outcomes on the other. The existing international architecture of climate change mitigation and adaptation policy and financing holds, in principle, the potential to address not only its main purpose of climate action, but also to contribute to development outcomes and address multiple risk drivers. Examples of this exist, but for these mutual benefits to emerge, and for climate finance to contribute more significantly to crises prevention, the agendas must become more aligned. Aligning several factors may enable coherence: i) Timeframes, from short-term response to multi-year programming; ii) Planning and targeting, moving towards conflict-sensitive area-based approaches and universal access to services; iii) Institutional arrangements and partnerships, coordinated national planning and jointly implemented local action.

Is climate finance aiding food security in developing countries? A focus on Sub-Sahara Africa

Is climate finance aiding food security in developing countries? A focus on Sub-Sahara Africa

Climate finance and women-hunger alleviation in the global south: Is the Sub-Saharan Africa case any different?

To unearth the influence of climate finance (CF) on women-hunger alleviation in Sub-Saharan Africa (SSA), the study used unbalanced panel data for 43 SSA countries for the period 2006-2018. Data was analysed using system-GMM to deal with the endogeneity problem inherent in the model, among other panel regression estimators. Also, the sensitivity of the estimates was carried out using panel fixed effect quantile regression. The findings showed that CF and its components have a significant effect on women-hunger alleviation in SSA, apart from FDI. Further, control of corruption also showed a significant women-hunger alleviation impact. For the climate variables, areas in SSA with higher temperature are more likely to experience worsened women-hunger. Based on the findings, the study recommends that SSA countries need to strengthen their fight against corruption. More so, donors should extend CF as financial aid or support to government budget, due to their potential of alleviating women-hunger.

Global climate financial risk

Climate change poses a major threat to long-term growth and prosperity and has a direct impact on the economic well-being of all countries. Extreme events cost US$143 billion per year due to climate change. The majority (63%) of this number is due to the loss of human life. Losses resulting from no action on climate change to the world economy could reach US$178 trillion in 2070. Benefits from accelerating the transition to net zero are US$43 trillion in the next 50 years, so climate-related financial risk management must be carried out as optimally as possible in industrial groups in the financial sector and non-financial groups. The World Economic Forum reports that climate action failure will dominate the next decade. To achieve financial stability, a strategy is needed through four main aspects: governance, strategy, risk management, and metrics and targets. The scenario that must be targeted is an orderly scenario to achieve global climate mitigation and adaptation targets. The transition to the new climate economy must be carried out by measuring predetermined indicators, as is done by the IMF. Mitigation indicators include environmental taxes, environmental protection spending, renewable energy, low-carbon technology trade, and forests and carbon. Adaptation indicators include carbon taxes, climate finance, the primary energy mix, fossil fuel prices, and the final energy mix.

Renewable energy projects in Africa: A review of climate finance strategies

This paper provides a concise overview of the comprehensive examination undertaken to assess climate finance strategies associated with renewable energy projects in Africa. The continent, endowed with abundant renewable resources, faces the dual challenge of meeting its rising energy demand while addressing climate change concerns. This review delves into the diverse landscape of renewable energy initiatives across Africa, emphasizing the pivotal role of climate finance mechanisms in driving sustainable development. The study explores a myriad of renewable energy projects, encompassing solar, wind, hydro, and geothermal technologies, implemented to mitigate the environmental impact of conventional energy sources. It investigates the financial instruments deployed to support these projects, including international funds, grants, loans, and public-private partnerships. The analysis considers the effectiveness of climate finance in fostering the adoption and scaling-up of renewable energy solutions within the unique socio-economic contexts of African nations. Furthermore, the research investigates challenges and opportunities associated with climate finance strategies in the African renewable energy sector. Common barriers, such as regulatory frameworks, institutional capacity, and market dynamics, are examined, alongside success stories that highlight innovative financing models and project implementations. The study also sheds light on the role of regional collaborations and the involvement of local communities in ensuring the sustainability and resilience of renewable energy projects. In addition, the review critically assesses the alignment of climate finance strategies with international climate goals, including the Paris Agreement. It analyzes the extent to which these strategies contribute to both mitigating greenhouse gas emissions and promoting adaptation measures in the face of climate change impacts. The findings aim to provide policymakers, investors, and stakeholders with valuable insights into refining and enhancing climate finance strategies for a more impactful and inclusive renewable energy transition in Africa. This review synthesizes a comprehensive understanding of the current state of renewable energy projects in Africa, emphasizing the critical role played by climate finance in advancing sustainable development. The insights generated from this analysis contribute to the ongoing discourse on effective climate finance strategies, offering a roadmap for fostering resilient and low-carbon energy systems on the African continent.