Ethiopia has embarked on a national strategy of building a climate-resilient green economy. This model therefore does not focus only on mitigation strategies, but it also valorises the importance of improving climate-resilience, described as the ability to anticipate and adjust to climate change risks. In particular, the need to transit to a green economy model that is more inclusive is receiving growing attention as a pathway that can lead to sustainable development.
This report explores the linkages and contribution of inclusive green economy policies and strategies to structural transformation in Ethiopia. In this regard, the report provides an assessment of how inclusive green economy-related policies can reinforce the structural transformation agenda of Ethiopia; and how structural transformation policies and strategies can enhance the development of an inclusive green economy. The intent is to enhance understanding and promote the adoption of inclusive green economy policies that will contribute to achieving the structural transformation goals of Ethiopia.
In recent years, a plurality of different governance initiatives has emerged that are designed to expand the disclosure of environmental risk within financial markets. The emergence of these initiatives represents an important policy development, and it has the potential to reduce environmental risk within the financial sector by incentivizing investments in sustainable economic activity capable of long-term value creation. Unfortunately, environmental risk disclosure has yet to be assessed as a field of governance activity in addition to its potential effectiveness in improving disclosure within financial markets.
Over the past 30 years, China has developed rapidly to become the world’s second largest economy, reaching the status of a middle-income country. Realizing this success, however, has involved a development approach entailing massive and inefficient resource use, and extensive damage to the quality of air, water and soil. Transforming from a resource- and pollution-intensive economy to a green economy is now a strategic priority for China. Success depends on the development of green industries and the transformation and reduced importance of many traditional industries. Success will be built heavily on green finance, and this is where China is headed.
The aim of this book is to develop specific proposals for greening China’s financial system, based on an analysis of current practice in China and an exchange of experience with international experts. The book proposes a framework for actions covering five key areas that, if adopted by the Chinese government, would promote the systematic development of green finance:
A. Establish and strengthen legal frameworks, including environmental laws and law enforcement that contribute to the demand for green finance.
This joint report by the Federation of Indian Chambers of Commerce and Industry (FICCI) and the UNEP Inquiry into the Design of a Sustainable Financial System highlights key proposals on aligning the Indian financial system with sustainability, by outlining feasible options for transformation of the Indian financial regulatory landscape, regulations and incentives that will channel finance into sustainable development priorities, and innovative markets for clean energy financing.
This document has been commissioned by the IFC and the UNEP Inquiry to explore the state of green finance in Colombia within the wider economic and financial sector context, and at the same time, to identify challenges and potential solutions that would enhance the application of environmental, social, and governance (ESG) criteria in the financial sector decision-making process and mobilize more investments for the transition toward a green economy.
The project involved two major steps:
1- it first undertook a holistic mapping of the Colombia green finance landscape with regard to the relevant stakeholders and the relevant types and volumes of finance, as well as current and planned financial policies, regulations, and standards;
2- it then identified the challenges that prevent increased green capital flow, and discussed how these might be overcome.
Central banks have wide ranging effects on the economy and society as a whole. Their decisions on monetary policy and sustainability are closely intertwined but the links between the mandates, objectives and instruments of central banks and a broad sustainability agenda are rarely reflected in policy debates.
This report focuses on monetary policy and its sustainability impacts in Bangladesh. It lays out areas for exploration and provides initial insights into Bangladesh’s economic development, its sustainability priorities as well as its financial system, and the relationship between these aspects and the country’s monetary policy. It also reviews the mandate, objectives, targets, and instruments of the country’s central bank, as well as the effectiveness of the transmission channels at its disposal. At the same time, it highlights that knowledge gaps on the topic remain significant.
This paper describes the challenge of modelling combined economic, ecological and financial systems and sets out a series of objectives for modelling the socio-economic transition towards sustainability. It highlights the modelling needs in relation to full employment, financial stability, and social equity under conditions of constrained resource consumption and ecological limits. It outlines the development of a dedicated system-dynamics model for describing Financial Assets and Liabilities in a Stock-Flow consistent Framework (FALSTAFF) and presents some hypothetical results calibrated for the Canadian economy. The selected scenarios illustrate the complex relationships between real and financial aspects of the macroeconomy and allow some initial tests on the financial viability of green investment.
Over 200 years ago, Adam Smith put forward the notion that individuals seeking to benefit themselves through trade were led as if by an invisible hand to a situation in which society as a whole could benefit. It can be argued, however, that social objectives such as sustainability and inclusiveness, do not emerge spontaneously through market forces. Such outcomes have to be designed through legal structures and institutions. In other words, for the invisible hand to operate, there needs to be a visible hand behind it.
By reviewing the financial inclusion experiments in South Africa and Kenya, this working paper provides some lessons for the design of the type of financial sector required for the transition from greed to green.
Policy-driven institutions such as national development banks (NDBs) and national green funds (NGFs) attract a growing interest to provide grants, credit-enhancement instruments or lend directly to project proponents in specific green sectors, with billions of dollars allocated by governments to support these interventions.
As part of ongoing efforts to better understand their comparative effectiveness to deepen national financial systems, the paper discusses the role of NGFs in catalysing institutional innovations and facilitating access to long-term affordable finance for green, low carbon and climate resilient investment. It argues that the key added value of NGFs might rest in their capacity to foster institutional innovations and partner with other financial and regulatory institutions to increase the diversity and depth of local financial markets in order to enhance the domestic supply of green finance.