Publications

This year again, expectations for the COP are high regarding developed countries’ commitments towards the funding of action against climate change and its impacts. The question of loss and damage, which pertains to questions of climate justice and of who should pay for the significant impacts of climate change endured by the poorest countries, has just been added to the official COP agenda. And climate finance will again be a hot topic: the pledge made back in 2009 by rich nations to channel US$100bn every year by 2020 to help less wealthy nations mitigate the rise in temperatures and adapt to climate change is still falling short of targets.

In 2022, the G20 raised a key question: are development banks well equipped to deliver their mandate and lead the way to a more sustainable development, in a world faced by multiple crises? Multilateral development banks (MDBs) and development financial institutions (DFIs) business model was historically developed around project financing. But they now need to shift to supporting the transition of their counterparts: country governments, ministries, financial regulators but also national public banks, local financial institutions and companies. A new journey for development banks, and a new journey for their counterparts. Quite a challenge.

The end of the year is always a busy period for the climate finance world, with international events multiplying to take stock of the latest achievements in the implementation of the Paris agreement and to identify the next – more ambitious – steps to be taken by the international community. Though the climax of these events is undoubtedly the COP (starting in two weeks in Sharm El Sheikh, Egypt), with the New York Climate Week, and the World Bank and IMF’s international meetings behind us, and the Finance in Common summit coming to an end, we start sensing that some topics are already drawing a lot of attention.

Over the past couple of years, the growing net zero commitments across financial institutions strengthened the focus on their portfolios’ greenhouse gas emissions. Yet, this focus does not guarantee emissions are truly reduced in the real economy. For that to happen, there is a pressing need for decarbonisation approaches focused on impact generation, with the appropriate indicators. According to Sarah Bendahou, Public development banks are in a unique position to adopt such approaches and indicators, paving the way for private financial institutions.

The industrial sector currently accounts for around 20% of French greenhouse gas (GHG) emissions.

The climate emergency is here and now. The consequences of climate change seemed remote to many and the summer of 2022 will perhaps be remembered as the summer of the end of carelessness.

The European Commission will propose a `carbon certification’ by the end of the year as a first step towards remunerating farmers and foresters who contribute to carbon farming. This certification project raises debates and concerns. For Adeline FAVREL of I4CE, the EU can respond and develop an ambitious certification by relying on the experience of the Member States in this field.

For a year, I4CE has been meeting with the campaign teams of the main presidential candidates to encourage them to prepare their climate program in order to reach the French objectives. In particular, we asked them to prepare their "climate budget": the State and more broadly the public authorities now play a decisive role in the necessary investments for the climate, and they must anticipate the considerable increase in these investments for France to achieve its 2030 objective. All the more now the European target has been raised. Preparing a climate budget is a mark of credibility and transparency, a test of consistency.

In France, the investments for the climate that will have to be made between now and 2030 to meet the objective are considerable. And since this target will have to be increased to contribute to the new European objective, the need for investment will also increase. Today, the State and public authorities are actively involved in climate-friendly investments. What will happen in the future? Who will pay, who will go into debt: the State, local authorities, taxpayers, households, companies or future generations?

The Basel Committee is finally taking up climate issues! Founded in 1974, this forum which brings together the financial supervisors of the G20 countries and which provides the main guidelines for guaranteeing financial stability has been absent from climate issues since Donald Trump's mandate. It recently published a first consultative document on the principles of climate risk management and supervision. Julie Evain presents the recommendations addressed by I4CE to the Basel Committee.

On December 15, 2021, as part of its communication on carbon sinks, the European Commission made public its proposals to strengthen carbon storage in agricultural soils. Its objective: to remunerate farmers to encourage them to store more carbon. To achieve this, it is first necessary to build a European carbon certification framework to guarantee the […]

Number of climate public policies have social impacts, and conversely. To foster the consideration of these joint climate and social effects in the development of public policies, actors are calling to turn the increasingly popular climate budget tagging exercises into climate AND social budget tagging exercises. Is it a good idea? Chloé Boutron and Solène Metayer, who attempted the exercise, are sharing their insights.

COP26 in Glasgow did not disappoint in terms of the volume of announcements from the financial sector. But what is behind the hype? While buried in an avalanche of ‘pretty words’, there was notable progress by financial institutions. They now look at the ‘alignment’ not just of what – but also of who – is financed.

The French government has just published the environmental budget assessment, or ‘Green Budget’ of its 2022 draft budget. Morgane Nicol of I4CE and Michel Colombier of IDDRI offer insights into these exercises, which are becoming more popular in many countries and local authorities. They highlight that the environmental budget assessment does not dispense with an Ecological Transition Strategy. Instead, […]

Expectations ahead of COP 26 in Glasgow regarding the contributions of the finance sector are high. Anuschka Hilke from [i4ce] explains that our expectations, however, may not currently be high enough. An impactful contribution to achieving climate goals will require the financial community to go beyond reducing their exposure to climate-related risks.

In this op-ed published in a French economic newspaper, Benoît Leguet, director of I4CE, considers that the French Government must plan over the long term the necessary financing for climate change mitigation and adaptation, by instituting a public finance programming law for climate. France has set itself climate objectives, it must clarify what means it will devote to them.

The IPCC scenarios are constantly cited when we are interested in climate and its evolution, but sometimes wrongly, and often without a clear understanding of what they imply. On the occasion of the release of the latest IPCC report, in which five new scenarios have appeared, Charlotte Vailles of  I4CE explains how they were constructed and what information is available about them. 

A core goal of the Paris Agreement is “make finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.” Since 2015, financial institutions of all types – from development banks to asset owners and pension funds – have committed to making their portfolios ‘consistent’ with the Paris Agreement. In practice, Financial Institutions are at times approaching alignment from different points of entry: either focusing on one hand “what” or on the other hand “who” is financed.

Today, all eyes are on the forthcoming 2021-2025 Climate Action Plan of the World Bank Group as a proxy for what the development finance community’s ambition for COP26 in Glasgow.The Climate Action Plans of Development Banks up until 2020 have been structured around climate finance commitments focusing on increasing their support for climate-specific activities. However, following up on their commitments to “Align with the Paris Agreement”, these institutions need to develop post 2020 strategies and actions plans, which go a step further to meet the level of ambition of the Paris Agreement objectives.

The government has recently modified the environmental, social and governance disclosure obligations for French investors via the publication of an implementing decree which specifies regulator expectations. Romain Hubert of the Institute for Climate Economics explains why this decree was to be expected and necessary for climate reporting.