Publications

The public institutions that regulate and supervise private finance will talk a lot about climate change in the coming months. The European taxonomy that allows economic actors to identify activities that are favorable to ecological transition or the "climate stress tests" of the Banque de France and ACPR are just some of the issues they will have to deal with and that we invite you to follow. I4CE has synthesized for you the "climate calendar" of financial regulation in a graphics.

A few days after the publication of France's 2021 budget bill, and before any debates in parliament, the government released an environmental assessment of it. This assessment, often referred to as the "green budget", is an important step forward for the transparency of public action, according to Marion Fetet and Sébastien Postic from I4CE. Nevertheless, they suggest improvements to be made to the scope of the budget analyzed or to the classification of certain expenditures. And they call for making the green budget a real tool for greening the budget.

Few green budgeting initiatives have led to concrete reforms or revisions of priority investments. How can we move from simple theoretical exercises to concrete action for the environment? This is the question asked by Sébastien Postic of I4CE, Oskar Lecuyer of AFD and Jennifer Doherty-Bigara of the Inter-American Development Bank (IDB).

2 billion euros: this is the amount that the French government will bet on hydrogen until 2022 as part of its recovery plan. An amount that will increase to reach 5.7 billion by 2030. I4CE invited researchers Jean-Pierre Ponssard from Polytechnique/CNRS and Guy Meunier from INRAE, both members of the Energy & Prosperity Chair, to analyze France's "hydrogen plan".

The French government has just officially unveiled the content of its €100 billion recovery plan, part of which is dedicated to the fight against climate change.

An international consortium of 14  expert organisations, including I4CE, has launched the "Energy Policy Tracker" website to track Covid-19 recovery packages from a climate and energy perspective. Initial results show that until now, G20 countries have granted much more aid to fossil fuels than to clean energies. What about France? Louise Kessler, Director of I4CE's Economics Programme, looks back at the government policies already adopted in France as well as those that are still at the announcement stage.

Decisions taken in response to the COVID-19 crisis today will lock in the world’s development patterns for decades. With policy decisions made on a daily basis, information about how public money is being spent can be hard to follow. That is why a consortium of 14 expert organizations came together to track energy-specific responses by G20 governments.

To accelerate and deepen this work, the new European Commission will adopt a renewed Sustainable Finance Strategy.  As the public consultation to define the future directions of this strategy draws to a close, Julie Evain from I4CE points out three challenges to be met in order to integrate climate issues into the financial sector.

Ian Cochran and Alice Pauthier explain why even with COVID19, public financial institutions (PFIs) must continue their important work on aligning their activities with climate and sustainability goals – and how their progress may be key to ensuring that the response to the crisis is both just and green.

In spite of its "greening" during the previous programming period, the Common Agricultural Policy has had very little impact on greenhouse gas emissions from the agricultural sector, even though they must be halved by 2050. And the CAP's two flagship instruments on environmental issues - green payments under the first pillar, and agri-environmental and climate measures (AECM) under the second - have come in for strong criticism.

The pandemic caused by Covid 19 has triggered a major economic crisis. The emergency treatment of this crisis relied heavily on massive recourse to fiscal and monetary instruments already widely used during the 2008 crisis. But financial regulation was also mobilized to ease or alleviate prudential constraints in order to preserve bank financing for economic players, especially those most affected by the crisis. This illustrates the different facets of the use of financial regulation: primarily intended to ensure the efficient functioning of financial markets and financial stability, it can also be used with economic policy objectives.

The current economic crisis has caused a drop in the price on the European carbon market (or EU ETS for European Union Emissions Trading System) and will contribute to the increase in the surplus of allowances. This highlights how necessary it is to reform the mechanism for managing this surplus or even to implement a floor price. However, for Charlotte Vailles from I4CE and Nicolas Berghmans from IDDRI, this crisis should lead us to consider the EU ETS no longer as the "cornerstone" of decarbonisation in Europe, but as a safety net.

A few months ago, the European Commission launched a consultation on the revision of the Non-Financial Reporting Directive. The issue at stake is to strengthen the obligation for 6,000 large companies to communicate publicly on how they deal with major societal issues, such as climate change and low-carbon transition. For Romain Hubert of I4CE, reporting must be strengthened in particular on the scenario analyses that companies conduct to identify the risks and opportunities of the transition. But what exactly should they communicate?

The world is confronted with a health crisis that has caused a global social and economic shock – and in the short term we must be focused on responding to this disaster. Nevertheless, it is also important to start preparing now for the aftermath of the COVID-19 pandemic to avoid a deep and lasting economic recession. Around the world, international, national and local stakeholders are starting to draw up recovery plans. Many recognize that actions that contribute to climate goals can be an effective part of improving both the economy and the resilience of our society. We thus have an opportunity to accelerate investments that will be both pro-recovery, as well as contribute to the fight against climate change. However, this will require that we do not repeat the mistakes of the past, as explains I4CE’s Quentin Perrier, who draws parallels from the post-2008 financial crisis recovery plan.

Many states have set themselves the objective of becoming carbon neutral: their residual emissions will have to be offset by equivalent absorptions by carbon sinks on their territory. Julia Grimault explains the uncertainties surrounding the forest sink and calls for localized and no-regrets actions to act against climate change.

For several years now, the idea of using capital requirements for environmental purposes has been gaining ground. But before this can happen, however, several questions about such requirements need to be resolved, particularly as regards the instrument to be used and the objective to be achieved. Michel Cardona from I4CE has released this OpEd available on Euractiv

Public development banks have a major role to play in the fight against climate change. Ian Cochran and Alice Pauthier from I4CE explain in this blogpost the principal technical and political challenges those finance institutions will need to overcome in aligning with the Paris Agreement objectives.

For too long climate change has remained confined to the green silos of our public institutions: it was onyl the business of Environment Ministries. The situation seems to have improved over the last ten years, but we are still a long way from “climate mainstreaming”. For Benoit Leguet, Director of I4CE, 2020 will offer multiple opportunities to test commitments, in France and internationally.

Aligning with the Paris Agreement: what does it mean for the International Development Finance Club?   International Development Finance Club Pavilion Saturday 7 December, 2-3:30 pm   The Paris Agreement has reframed climate action from a focus on the near-term incremental increase of adaptation and mitigation actions to emphasize the importance of the long-term transformation […]

On 25 October, a conference was held in Paris to “replenish” the resources of the Green Climate Fund. 27 countries have made pledges, for a total amount of nearly $10 billion. Good news? Insufficient? For Alice Pauthier of [i4ce], the impact of the Green Climate Fund should not only be assessed against this figure. The Fund also has a transformational effect, particularly on the many financial institutions that, in order to access its resources, must follow an accreditation process. A process that may well become more and more demanding.