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Money makes the world cool down – or does it?

Uniting to address climate change around the world
Professor Sarah Bracking

Professor of Climate and Society, Department of Geography

09 November 2021

With the COP26 in Glasgow in full swing the world watches to see if a step change in public action to keep '1.5 alive' is possible. The COP26 has been vibrant with scientists, policy makers and delegates discussing every aspect of ecological and societal change. But the key role of finance has been at its sometimes-hidden core. Will the over 500 delegates affiliated to fossil fuel companies (The Ecologist, 2021) resist any substantive changes that reduce profits from coal, oil, and gas assets? Or will the most vulnerable populations, already under-represented due to the pandemic, win their moral case for grants in loss and damage, and more rapid change to close these carbon guzzling industries? With a general sense of time running out, the stakes could not be higher. While the finance to seal a deal is currently severely lacking, even if it were found, this is not a crisis that we can spend our way out of: the privileged must consume less.

The Climate Policy Initiative produced a diagram of the different types and volumes of climate finance available globally in 2019-20. It shows that there was USD$632 in aggregate, of which only USD$36 billion was in grant form (less than 6 %), and only USD$46 was for adaptation (just over 7%) (Climate Policy Initiative, 2021). This means that the vast majority of finance available to mitigate (try and reduce) and adapt to (for those who are already suffering) climate change is something that the poorest countries must borrow and pay back with interest. This adds to already excessive rates of indebtedness in the poorest countries, dating back to the ‘Lost Decade’ of development in the 1980s, debts which were recently bloated again by Covid-19. Thus, the context in which finance must be mobilised at scale, to follow market parlance, involves the poorest countries borrowing more to respond to a crisis they had negligible part in making: a particularly morally egregious request. Put another way, for the richest historical polluters, this makes mobilising climate finance both a technical issue and an opportunity to make a moral choice: either to further exploit, or provide reparations for, the historical harm that they have caused.

Climate finance provided by public institutions and governments, who promised the magic US$100 billion for the poorest countries by 2020 back in 2009, has now reached only US$88 billion (predicted for 2021), and will only rise to the promised threshold by 2022 or 2023. Avinash Persaud quite rightly referred to this as a ‘village hall’ budget for a transition that will cost some trillions per year (Persaud, 2021). There is a financing gap in funding transition to a lower carbon future. Norway, Sweden and Germany are contributing the most, with the UK 11th on an OECCD list of those countries providing their ‘fair share’ of climate finance (Roberts, 2021). But the accumulated price tag for moving energy, infrastructure, transport, built environment, agriculture, manufacturing to a net zero or sustainable pathway appears in the hundreds of trillions. Of course, some of these calculations seem like a supermarket style acquisition of products, including whole buildings, dams and so forth – ideal for investors (Bracking, 2021). But accepting that just transitions require resourcing, what are the sources of optimism? They appear be three: first, the private sector has ‘trillions’; second, responding to climate change is not just about spending money; and third, there are other policy options available that are currently not being considered at COP26.

First, the private sector is often viewed as having a near limitless vault of trillions in assets that merely requires to be switched or repurposed. Much optimism in Glasgow is based on commitments to recategorize or repurpose current investments. For example, Mark Carney – former UK Bank of England Governor and now official UN envoy on climate finance - is leading a coalition of international financial companies signed up to tackle climate change at COP26 called the Glasgow Financial Alliance for Net Zero (Gfanz). He argues that the alliance of 450 banks, insurers and asset managers across 45 countries has $100-130tn of financing to help economies transition to net zero over the next three decades. Citing a UN analysis, Carney claims the private sector has 70 per cent of the total investments we need to meet net zero goals (UN, 2021).

Leaving aside the oxymoronic properties of ‘net zero’ for a moment (Böhm and Sullivan, 2021), this optimism is dampened by continued fossil fuel investing by the same alliance members and that some of these new commitments amount to relabelling older investments as ‘green’. The 93 banks who have signed the pledge provided US$575billion to the fossil fuel industry in 2020 (Rainforest Action Network, cited in The Financial Times, 2021) proving again that cognitive dissonance is at record levels in green discourse. Below the headline figure, “investment managers account for $57tn of the assets, with $63tn coming from banks and $10tn from asset owners such as pension funds”. Of the investment managers, in 43 of the 221 signatories “only one-third of their assets were aimed at investments with ‘net-zero’ targets” (Roberts citing Rain Forest Alliance, 2021). This is a further demonstration of the prolonged problem of assessing what is ‘green’ in a market where non-pure play investments are counted at full face value (Bracking, 2019). This is mostly not new money, and the figure includes counting pre-existing ‘green’ fixed assets, including mortgages, finance which can’t be allocated to new projects.

A second source of optimism is that there are wider policy commitments emerging in Glasgow which switch investment from fossil fuels to renewable energy, such as the positive announcement that at least 20 countries and banks, including the UK, US, and EIB will withdraw from fossil fuel investments overseas from 2022 (The Guardian, 2021). Sometimes real change is about not spending money. However, there are still caveats here, including that they can still invest in fossil fuels domestically, including the UK in new North Sea oil fields. Projects in the pipeline will continue, such as the UK funding of Mozambique’s new gas field, which is also widely viewed as causing conflict. Also, perhaps the dirty investors will just be sub-contracted down the financial supply chain? The African Development Bank did not join the anti-coal commitment and was quick to cancel its meeting with stakeholders (Daily Maverick, 2021). On other similar commitments, such as on halting deforestation, action is pegged out to 2030, allowing a performance of care within an undermining delay.

A third source of optimism is that COP26, important as it is, is only one conference, and that climate finance, while important in Glasgow, is only one aspect of responding to climate change. Even if all the climate finance was borrowed and spent at the US$100 billion headline figure, the impact still depends on how it is spent. The financial orthodoxy promotes a supercharged new longue durée of debt-based capitalist accumulation. If all the money were found, it is possible that spending it in the ways suggested would lead to further dystopian tipping points as resource constraints on our finite planet, such as with lithium, cause further human conflict. In short, it wouldn’t work. Only the privileged would believe that you can spend your way out of this type of crisis of over-production, overconsumption and unaccountable privilege. For the poorest countries in particular, credit-based financing of climate adaptation and mitigation – especially involving hard currency liabilities - should be rejected as it will lead to further indebtedness and pressure to increase export earnings to repay the loans. Africa, and other developing countries, are owed an ecological debt and reparations for historic unequal ecological exchange in the form of grant-based loss and damage (Africa Climate Justice Group, 2021).

Roberts argues that the calculation of ‘Around $50trn over 30 years’ which is needed for Paris alignment, or ‘$4trn a year for the next ten years’ is ‘really a small cost, no more than 2.5% of annual world GDP’ (Roberts, 2021). So the money could be found. But to succeed, we must pay more attention to how it is generated and how it is spent: humans and other species need a reformed global economy of degrowth and sustainable consumption. To enable a just transition, loss and damage reparations should be paid in grants from stocks of historic special drawing rights (SDRs) at the multilateral development banks. For development banks, whose shareholders are mostly Global North states, this would be a small percentage of the wealth historically generated by their activities. Grants to countries in climate emergency would be from reserves and would represent rightful compensation for the long-standing financing arrangements that worsened the climate crisis: loans and investments that facilitated fossil fuel infrastructure, deforestation and mega-hydropower facilities. Reserves could be replenished by a new global financial sector transactions tax to discourage further speculative bubbles and financier super profits. In short, the EU and G20, US, and emerging large polluters (e.g. the BRICS countries), which have the most influence in the UNFCCC, have this historic chance to response with compensation and reparations to those countries whose exploitation has historically generated their income superiority. By so doing, they would be investing in climate finance and a better future.


The Africa Climate Justice Group 2021. African People’s Statement on COP 26 - Rise Up and Demand Climate Justice! Statement of the 2021 African People’s Counter COP.

Böhm, S. and Sullivan, S., 2021, (Eds), Negotiating Climate Change in Crisis. Cambridge, UK: Open Book Publishers. Available from

Bracking, S. 2019. Financialisation, climate finance, and the calculative challenges of managing environmental change, Antipode 51 (3), 709-729.

Bracking, S. 2021. Climate finance and the promise of fake solutions to climate change. In S. Böhm and S. Sullivan (Eds), Negotiating Climate Change in Crisis. Cambridge, UK: Open Book Publishers, pp.255-276. Available from

Climate Policy Initiative 2021. Global Landscape of Climate Finance 2021. Baysa Naran, Pedro Fernandes, Rajashree Padmanabhi, Paul Rosane, Matthew Solomon, Sean Stout, Costanza Strinati, Rowena Tolentino, Githungo Wakaba, Yaxin Zhu and Barbara Buchner. October 18, Available from Global Landscape of Climate Finance 2021 - CPI (

Daily Maverick, 2021. African Development Bank kicks civil society organisations to the kerb at COP26. By Charity Migwi, Dean Bhebhe and Nicole Rodel. Available from

Financial Times, The 2021. Available from Do the maths on Mark Carney’s $130tn net zero pledge stack up? | Financial Times (

Guardian, The 2021. Twenty countries pledge end to finance for overseas fossil fuel projects. Available from

Persuad, A,. 2021. Saving Paris: An economically efficient and equitable rescue plan | VOX, CEPR Policy Portal (

Roberts, M., 2021. Financing the Climate, 5th November available from Financing the climate – Michael Roberts Blog (

United Nations 2021. Biggest Financial Players Back Net Zero. Available from



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Sarah Bracking

Sarah Bracking

Professor of Climate and Society

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