Scaling Up Sustainable Finance and Investment in the Global South
EditedbyDirkSchoenmakerandUlrichVolz ScalingUpSustainableFinanceandInvestmentintheGlobalSouth ScalingUpSustainableFinanceandInvestmentintheGlobalSouth CEPRPRESS CentreforEconomicPolicyResearch33GreatSuttonStreet London,EC1V0DX,UK 187boulevardSaint-Germain 75007,Paris,France Tel:+44(0)2071838801 Email:cepr@cepr.orgWeb:www.cepr.org ISBN:978-1-912179-66-4 Copyright©CEPRPress,2022. ScalingUpSustainableFinanceandInvestmentintheGlobalSouth EditedbyDirkSchoenmakerandUlrichVolz SUSTAINABLEFINANCE CENTREFORECONOMICPOLICYRESEARCH(CEPR) TheCentreforEconomicPolicyResearch(CEPR)isanetworkofover1,500researcheconomistsbasedmostlyinEuropeanuniversities.TheCentre’sgoalistwofold:topromoteworld-classresearch,andtogetthepolicy-relevantresultsintothehandsofkeydecision-makers. CEPR’sguidingprincipleis‘Researchexcellencewithpolicyrelevance’. Aregisteredcharitysinceitwasfoundedin1983,CEPRisindependentofallpublicandprivateinterestgroups.IttakesnoinstitutionalstandoneconomicpolicymattersanditscorefundingcomesfromitsInstitutionalMembersandsalesofpublications.Becauseitdrawsonsuchalargenetworkofresearchers,itsoutputreflectsabroadspectrumofindividualviewpointsaswellasperspectivesdrawnfromcivilsociety. CEPRresearchmayincludeviewsonpolicy,buttheTrusteesoftheCentredonotgivepriorreviewtoitspublications.TheopinionsexpressedinthisreportarethoseoftheauthorsandnotthoseofCEPR. ChairoftheBoardSirCharlieBeanFounderandHonoraryPresidentRichardPortes PresidentBeatriceWederdiMauro VicePresidentsMaristellaBotticiniUgoPanizzaPhilippeMartinHélèneRey ChiefExecutiveOfficerTessaOgden Contents Forewordvii Introduction1 UlrichVolzandDirkSchoenmaker PartI:Mitigatingrisksandharnessingopportunities 1Firmsandfinanceduringthegreentransition11 RalphDeHaas,RalfMartin,MirabelleMuûlsandHelenaSchweiger 2Mobilisinglong-termfinanceintheGlobalSouth:Lessonsfromthe‘South’ and‘North’21 RichardMarkDavis,AaronLevine,RobertRusconiandFionaStewart 3UnleashingclimateinvestmentinAfrica35 RabahArezki 4Bridginggreeninfrastructureandfinance45 KarimElAynaouiandOtavianoCanuto 5InspiringsustainablerecoverythroughsustainablebondmarketsinASEAN+361 KosintrPuongsophol,ShuTianandSatoruYamadera 6Thepotentialsandlimitationsofblendedfinance81 SamanthaAttridge 7Assessingclimaterisksforlong-terminvestmentsandtheroleofmultilateraldevelopmentbanks93 DeboraRevoltella,TessaBending,RicardoSantosandSanneZwart 8Thekeyrolesofdevelopmentbanksinfinancingthestructural transformation105 StephanyGriffithJones 9Theroleofcentralbanksandsupervisorsinscalingupsustainablefinance andinvestmentintheGlobalSouth109 UlrichVolz,SimonDikau,ElenaAlmeidaandNickRobins 10Adaptationandresiliencefinance:Theroleof‘alignment’inscalingupadaptationandresiliencefinanceintheGlobalSouth133 NicolaRangerandMichaelMullan 11Inclusivegreenfinance149 PeterKnaackandUlrichVolz 12Harnessingthepotentialofdigitalfinanceforfinancingsustainabledevelopment161 SimonDikau,MarianneHaahrandUlrichVolz PartII:Regionalandcountrycasestudies 13ScalingupsustainablefinanceandinvestmentintheGlobalSouth: ThecaseofLatinAmericaandtheCaribbean175 GianleoFrisari 14ThesustainablefinancelandscapeinBrazil191 AnneliseVendramini 15ScalingupsustainablefinanceandinvestmentintheGlobalSouth: Acasestudyofsub-SaharanAfrica201 ReubenWambui 16Politicaleconomyimperativesandfinancingneeds:SouthAfrica’sjusttransitiontoalower-carboneconomyandaclimate-resilientsociety229 DipakPatel 17ScalingupsustainablefinanceandinvestmentintheMiddleEastand NorthAfrica243 NuranAshrafAtef 18ScalingupsustainablefinanceinIndia263 SuranjaliTandon 19SustainablefinanceinSoutheastAsia281 SwisaAriyapruchyaandUlrichVolz 20ScalingupsustainablefinanceandinvestmentintheGlobalSouth: China’sexperience303 LiuWeiandChengLin Foreword Creatingeconomicallyandpoliticallylegitimatesolutionstotackleclimatechangeisoneofthemostpressingandchallengingissuesofourtime.Foremerginganddevelopingeconomies,thetaskismademoredifficultduetoalackoffinancing,increasingdebtaccumulationandtheneedtoaddressdomesticsocioeconomicissues. ThiseBookprovidesacomprehensiveoverviewofthefinancinggapthatemerginganddevelopingcountriesfacetomeettheSustainableDevelopmentGoalsandParisclimategoals.Itprovidesdetailedcountry-andregion-levelanalysisofthechallengesandopportunitiesofscalingupsustainablefinanceandinvestmentanddiscussestherangeofinstrumentsthatcouldbeusedtoreachtheseclimateanddevelopmentobjectives. Theauthorspointtothecentralroleofmonetaryandfinancialauthoritiesinaddressingsustainabilityrisksandscalingupsustainablelendingandinvestment.Theyalsostresstheneedtomobilisedomesticfinancialresourcesthroughlocalbankingsystemsandcapitalmarketsandchannelthemintodomesticinvestments.Effortscanbeundertakentoattractmoreinternationalcapitalandgovernmentsshouldexplorewaystousedigitaltechnologiestodevelopnew,creativefundraisingapproaches. Itisclearthatasubstantialfinancinggapexistsindevelopingcountries,whichwillnotbeeasilyovercome.However,thepoliciesproposedinthiseBookprovideinnovativeandsustainablesolutionsforpolicymakerstomakemeaningfulprogress. CEPRisg
