Conference Agenda

Recent developments in the scholarship of global finance have called attention to the emergence of the Wall Street Consensus (WSC), a concept that captures the attempt to restructure development interventions around partnerships with global finance. The WSC can also be understood as “development as derisking,” a new paradigm where investments are assessed by how bankable they are or whether people are willing to pay for the goods or services a project delivers. The WSC has reframed the Washington Consensus in the language of sustainable development goals and has been identified in climate negotiations such as COP26 and COP27. The Green Climate Fund (GCF), one of the largest sources of multilateral climate finance, represents an important site where the WSC plays out. This study seeks to understand the extent to which the politics and funding ideologies of the GCF reflect the WSC. We also aim to examine how the WSC and the derisking narratives associated with it, shape the types of projects that are supported or excluded by international climate finance. We conducted a virtual ethnography of GCF board meetings to analyze the deliberations on funding proposals. At each meeting, the board spends several hours discussing submitted proposals. Our sample included deliberations on 205 projects, and over 42 hours of board meeting deliberations. Discussions were thematically coded to reveal concerns raised by both board members and observers and a structured content analysis connected these concerns to the concepts that frame the WSC narratives. Our findings suggest that board members engage with the WSC and the de-risking agenda that promotes and reinforces new bankable projects that attract capital flows as a priority. Our findings also indicate a connection between the prioritization of public-private partnerships and fund of funds arrangements with the values of the WSC. We argue that the concerns raised for projects that targeted individuals, communities, or vulnerabilities emerged in large part because the logic of these projects diverged from the WSC. These findings have significance for the types of projects that receive funding, i.e., those deemed bankable, which emphasizes how the power of global finance limits the inclusive reach of the solutions proposed by project proponents. These results also illustrate how climate finance governance serves as a gateway for further financialization of recipient countries, raising concerns about the potential of such institutions to promote climate justice. Through the WSC, developing countries are further subordinated to global financial capital.

Institutional investors, who control as much as $154 trillion globally, are positioned to play a major role in shaping the global response to the climate crisis and the energy transition, both as a potential source of capital for green projects and as major stakeholders in the companies producing, distributing, and consuming fossil fuels. Research on investors and the fossil fuel industry focuses predominantly on the fossil fuel divestment movement or on shareholder engagement as a means of influencing firms. This review widens the scope of attention to investors, asking: what avenues for influencing the fossil fuel industry are available to institutional investors and what are the implications of these for achieving an inclusive fossil fuel phase out? Systematic and scoping search methods are used to identify 137 relevant papers, through which seven strategies for influencing the fossil fuel phaseout are identified: divestment, engagement on climate issues, investor hiring practices, engaging with investments in the financial sector, engagement with indirect financial actors, litigation, and green investment. While these strategies enable investor action (and suggest focus areas for activists and policy makers), their potential for accelerating a fossil fuel phaseout is generally limited by investor mandates to pursue financial returns above other concerns. We also identify a trend of consolidation of decision-making power in a small number of for-profit actors, which limits investor capacity and illustrates the undemocratic allocation of, and control over, finance. Despite the multidimensional, global effects of climate change (and finance’s involvement), much research in this area remains focused on actors in the Global North and the financial implications of their strategies. We argue that future research should prioritise: (a) the social, equity, and development-related implications of investor strategies, (b) the Global North-Global South dynamics associated with financial decision making in the Global North, and (c) policy solutions capable of overcoming investors’ short-term profit motives to instead incentivise long-term investor engagement with climate issues.

The Anthropocene has become a contextual condition for International Relations research and emphasizes climate change as a civilizational driver. Global climate governance has undergone relevant changes since the 1990s toward more decentralization, diverse elements, and the engagement of multiple actors at different levels, with solid research from an institutionalist perspective. However, the mobilization of resources to implement climate action has been insufficient, therefore reinforcing the alerts of the Anthropocene as a paradigm.

International political economy as an analytical lens offers an alternative reading on how to encourage a transition to a low-carbon economy. Innovative solutions may stem from but not remain limited to financial processes and instruments. For that, the assessment of power and particular interests, policy and governance interventions, and financial institutions dynamics become relevant variables for analysis. In the context of the growing participation of state-led investment banks in climate finance, these institutions can play a role in the long term, enabling actions that go beyond a market-failure perspective.

Therefore, this paper aims to analyze how public finance through three national development banks in Brazil encourages a low-carbon transition and whether they present innovative solutions. The analysis is based on a content analysis of reports, statements, policy briefs, and other relevant public documents from the Bank of Brazil (BB), the Brazilian Development Bank (BNDES), and Caixa Economica Federal (CEF).

This proposal is a pertinent assessment considering Brazil’s characterization as a climate power and a relevant economic actor in the international system. For instance, the Brazilian National Development Bank (BNDES) claimed that it raised US$ 500 million in 2021 with the New Development Bank for climate-related projects. The Bank of Brazil (BB) is one of the country's largest rural credit operators, while agribusiness is closely related to the country’s GHG emissions profile. Also, Caixa Economica Federal (CEF) has a Social and Environmental Fund (FSA) and a Forests Program with the objective of recovering and protecting forests and conservation units in all Brazilian biomes through financing and actions.

Through a landscape of public finance for climate change from the major state development banks in the country, we explore how financial processes and instruments from the development banks are operating to mobilize resources for climate action and a long-term low-carbon transition. Also, it searches for innovations and novel solutions in play.