Climate Policy Initiative’s Post

Are #PDBs Paris-aligned? Many public development banks (PDBs), particularly those in emerging markets and developing economies, are yet to implement a framework that aligns with the Paris Agreement. This report published by CPI and I4CE - Institut de l'économie pour le climat / Institute for Climate Economics evaluates the main approaches adopted by financial institutions, and identifies the key operational benchmarks used to support their implementation. 🔍 Learn more: https://bit.ly/3xrRWC3 #parisagreement #climatefinance #publicdevelopmentbanks

Hazel Ilango of Institute for Energy Economics and Financial Analysis (IEEFA) discusses how rating stability is at risk from climate-related downgrades: https://lnkd.in/e-Q__Kvr The Credit Rating Research Initiative #creditratings #climate #downgrades

#ClimateSolutions | Moving from project-based approaches to more coordinated country platforms with local financial institutions, public financial institutions must collaborate as a system. However, there is a lack of comprehensive information regarding the current state of interaction between MDBs and NDBs in emerging and developing economies (EMDEs), particularly about financing flows related to climate change. This report published by CPI and E3G advances the understanding of climate finance cooperation between MDBs and NDBs in EMDEs. https://lnkd.in/dUxSyTba #MDBs #NDBs #climatefinance #parisagreement

Excellent article. Kudos, Hazel Ilango. It’s great that you use the language of ratings to nail the problem. But giving this section a second look— “The announcements are signaling that the accumulating climate risks, though yet to result in tangible and predictable effects, will likely lead to rating volatility and instability, a costly affair for investors and issuers. Investors would need to transact the same securities with greater frequency, while regulated institutions would have to more closely manage their asset-liability risks and provide for significantly higher capital buffers so as not to be caught out by a sudden downgrade.” —the focus in this passage—is on ratings, a cathexis for the real problem: climate change. And I’d like to point out that the problem of ratings volatility is not unique to climate change, as important as climate change is. It was a problem for structured finance too, that got shoved under the rug until it exploded. Ratings volatility is an artifact of a static rating system that can’t deal with probabilities. Any credit proposition that has not been artificially stabilized by interposing a “going concern” that has a traditional (static) balance sheet is exposed to ratings volatility. And any investor investing in asset pools—or bonds where the asset risk has a statistical nature—will be exposed to volatility in the valuation. The more static the rating system, the bigger the gap between projection and reality. 镜花水月

Thoughts? Mine are in the comments section.

The understanding of climate finance flows and Paris alignment will help us plan and ensure climate change mitigation strategies are put in place and implement.

Institute for Energy Economics and Financial Analysis (IEEFA) say that credit rating agencies are getting more stringent on standards for climate risk evaluation: https://lnkd.in/ex4eNeQt The Credit Rating Research Initiative #creditratings #climate #risk

S&P Global Ratings is proud to support the upcoming New Frontiers in Climate Finance conference, at Imperial College London on 28 September 2023. Designed for climate-focused finance professionals from both the private and public sector, this one-day event hosted by the Centre for Climate Finance & Investment at Imperial College London will present the latest innovations in financing, research and analytics to help the financial community address the challenges and opportunities of climate change. Paul Munday, Director Global Climate Adaptation and Resilience Specialist, S&P Global Ratings will participate in a panel discussion on ‘Adaptation & Resilience: New Financial Solutions’. More here 👉 https://ow.ly/HMO450POXy7 #NFCF #CCFI #ClimateFinance #ClimateChange #ImperialMeansBusiness

What are MDBs? 💰 Multilateral development banks (MDBs) are major providers of public climate finance. This funding helps countries reduce their greenhouse gas emissions and adapt to the impacts of climate change. MDB #ClimateFinance to developing countries hit a record high for the second consecutive year, but that's not the whole story. WRI Finance Center experts lay out the good, the bad, and the urgent in their summary of the latest #MDB Joint Report on Climate Finance 👇https://bit.ly/3SIweQH

Three ways to scale up debt-for-climate swaps 10 November 2023 Karim Karaki Alfonso Medinilla San Bilal Multilateral debt reform has been slow since the pandemic. But debt-for-nature swaps are emerging as a unique tool to combine financial and climate action https://lnkd.in/excT_4t8 # africa climate economics cop28