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Climate Finance

The long-term transition to a net-zero and resilient future requires trillions of dollars of investment and an unprecedented shift in the global financial system. This transition presents immense economic and development opportunities, yet today there is a huge gap between the need for finance and actual finance flows. This is felt most in low and middle income countries, particularly those vulnerable to the impacts of climate change.  Channeling the finance needed to enable and accelerate this transition will require collective global action across the public and private sectors. 

New Frontiers in International Development Finance (NeF DeF), School of Law

This project is led by Dr Celine Tan as part of a Fellowship with Warwick's Institute for Global Sustainable Development.

The New Frontiers in International Development Finance (NeF DeF) project brings together research and policy thinking on how the shifting landscape of international development finance impacts on law, regulation and governance.

A significant shift in the policy architecture of international development finance is taking place. Under the aegis of the UN’s Sustainable Development Goals (SDGs) and other international agreements, such as the UN Framework on Climate Change (and the Paris Agreement), plans are underway to move away from more traditional public financing of sustainable development to the active engagement of the private sector in the mobilisation and delivery of development finance. This includes a) official partnerships with financial actors not traditionally engaged in development finance, such as hedge funds, pension funds, insurance companies and private equity firms; and b) creating new commodities, markets and forms of financial instruments to fund public goods and services, including securities, bonds and insurance.

This evolving landscape poses significant challenges to the regulation and governance of the international development architecture and broader transnational economic governance. As new partnerships and modalities of engagement are formed, existing structures of governance and accountability are reconstituted, reshaping the relationships between different actors to a development finance transaction and reconfiguring the regulatory modalities through which these relationships are governed.

The Nef Def project seeks to engage in an interdisciplinary examination of these changes in international development finance policy and practice, drawing from insights from a range of disciplines including law, politics, economics and finance, sociology and geography. The focus is to map, assess and critique this evolving architecture and what this means for international development cooperation and global economic governance.

For more information please visit the project website.

Financially redesigning the Anthropocene: Investigating tools, data, and practices for climate risks and targets, Warwick Business School

Capital allocation is a powerful way of distributing agency‚ both diverting and directing it. The consequences of this feature of financial markets have never been limited to only direct market participants but, of course, stretch out into virtually all spheres of societies and environments. To a large extent, the global climate crisis is one of these consequences. This research project looks at the various finance-focused programmes that are currently pursued to manage the climate crisis as leveraging this feature of financial markets to redistribute‚ purposefully divert and direct‚ agency towards more sustainable economies and societies. These programmes could be described, in other words, as attempts to‚ financially re-design‚ the Anthropocene. 

This UKRI funded research project (2020-2024) aims to trace these attempts by focusing on one core challenge: the production of actionable data and analytics for climate risks and alignment targets that enable climate risk and impact management practices in the investment industry. While a lot of different high-level policy, NGO and industry programmes have recently been initiated, this project is more about how the proposed tools, data and manuals are actually implemented, used and combined in financial every-day practices.  

Through the practical integration of climate risk and impact programmes, there is a growing and still to-be-consolidated financial climate‚ knowledge infrastructure‚ which draws on tools and data from an ecosystem of various actors. Climate-related tools, data and practices that are currently provided and applied by these actors throughout the financial markets are central in dealing with both the impact of climate risks on investments and the impact investments have on the climate, environments and societies. Four types of actors that are active in climate-related investment practices on the ground‚ and which the researchers currently work with are: institutional investors, investor networks, analytics and data providers, and NGOs.  

The project seeks to investigate the very practical concerns and challenges that the variety of actors encounter and their efforts to overcome them. It systematically traces and analyses in real-time the activities of those different stakeholders within and across these organisations. Following a qualitative research approach, the team of four researchers drawing on observations, interviews and documents to trace in detail how those different organisations, respond to and engage with climate-related financial risks and alignment targets through deploying and employing climate tools, data and practices.  

For further information, please contact Katharina Dittrich (Katharina.Dittrich@wbs.ac.uk) and Julius Kob (Julius.kob@wbs.ac.uk) 

A critical analysis of the impacts of COVID-19 on the global economy and ecosystems and opportunities for circular economy strategies, WMG

The World Health Organization declared COVID-19 a global pandemic on the 11th of March 2020, but the world is still reeling from its aftermath. Originating from China, cases quickly spread across the globe, prompting the implementation of stringent measures by world governments in efforts to isolate cases and limit the transmission rate of the virus. These measures have however shattered the core sustaining pillars of the modern world economies as global trade and cooperation succumbed to nationalist focus and competition for scarce supplies. Against this backdrop, this paper presents a critical review of the catalogue of negative and positive impacts of the pandemic and proffers perspectives on how it can be leveraged to steer towards a better, more resilient low-carbon economy. The paper diagnosed the danger of relying on pandemic-driven benefits to achieving sustainable development goals and emphasizes a need for a decisive, fundamental structural change to the dynamics of how we live. It argues for a rethink of the present global economic growth model, shaped by a linear economy system and sustained by profiteering and energy-gulping manufacturing processes, in favour of a more sustainable model recalibrated on circular economy (CE) framework. Building on evidence in support of CE as a vehicle for balancing the complex equation of accomplishing profit with minimal environmental harms, the paper outlines concrete sector-specific recommendations on CE-related solutions as a catalyst for the global economic growth and development in a resilient post-COVID-19 world.

You can access the full article here.

For further information, please contact Dr Ibn-Mohammed t.ibn-mohammed@warwick.ac.uk or Professor Janet Godsell J.Godsell@warwick.ac.uk 

Key UN Sustainable Development Goals in this theme are:

SDG13 iconSDG17

Researcher Department

Research Details

Dr Keith Hyams

Politics and International Studies

'Mapping Narratives of Urban Resilience in the Global South', (with Maud Borie, Mark Pelling, and Gina Ziervogel), Global Environmental Change 54 (2019): 203-213

Professor Sohnke Bartram

Warwick Business School

The Real Effects of Climate Policy: Evidence from the California Cap-and-Trade Rule

This research project documents that localized policies aimed at mitigating climate risk can have unintended consequences due to regulatory arbitrage by firms. Using a difference-in-differences framework to study the impact of the California cap-and-trade program with US plant level data, we show that financially constrained firms shift emissions and output from California to other states where they have similar plants that are underutilized. In contrast, unconstrained firms do not make such adjustments. Overall, unconstrained firms do not reduce their total emissions while constrained firms increase total emissions after the cap-and-trade rule, undermining the effectiveness of the policy.

The research is available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3816874. It is forthcoming in the Journal of Financial Economics

Cecilia Yu

Warwick Business School

Research Taxonomy Themes & Interests:

Sustainable Business Initiatives: Quantum Cognition Theory focusing on theories of Intangibles. Sustainable & Ethical social and economic development; Organisational role of UN and Individuals.
Strategy in Creative Industry: Feminism, Humanistic management & economic discourse, Impact of calculative practices on strategy making, power, accountability, and strategic change. Co-production & co-creation, Semiotic/visual theory and Big data analytics, Travel of ideas across fields, Intangible Cultural Heritage (ICH)
Global South: Sustainability, Strategy implementation & process, Political economy of management in Africa + Far East Social innovation. User innovation, Philanthropy, Governance & public sector management.
Entrepreneurship: Innovation & Development: Entrepreneurial ecosystems, Geographies of entrepreneurship, Macro + Micro Incubation of creative firm networks

Professor Bo Chen

Warwick Business School

Researching sustainability and closed-loop supply chain coordination in the pharmaceutical sector with dynamic game-theoretic analysis (2021 – 2025)

 


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