Navigating Green Finance: Challenges and Opportunities Explored at SDG Conference

The SDG Conference in Bergen started with a dynamic discussion on green finance, shedding light on the complexities and opportunities in financing the shift towards sustainability. Moderated by Natalia Buier, the session featured insights from Ruth Carlitz of the University of Amsterdam, Lina Strandvåg Nagell from Bellona, and Yann Robiou du Pont from Utrecht University.


Climate Finance: Addressing Inequity and Aligning Investments with Needs

Ruth Carlitz introduced the session by highlighting the disparity between climate change impacts and emissions, underscoring the responsibility of higher-income countries to address the disproportionate effects on lower-income nations. She unpacked the concept of climate finance, stressing the need for transparency and effectiveness in allocating funds to support mitigation and adaptation efforts.


Sustainable Finance: Unveiling the Taxonomy Tango

Lina Strandvåg Nagell shifted the focus to sustainable finance and its role in industrial decarbonisation. Highlighting the complexities of defining “sustainable,” Nagell emphasised the need for clear operationalisation to ensure alignment with climate goals. She discussed Bellona’s involvement in the EU’s sustainable finance taxonomy, aiming to standardise sustainable economic activities within the bloc and reduce international market fragmentation. However, including fossil gas power plants in the taxonomy sparked debate, underscoring the challenges of balancing economic considerations and climate imperatives. Nagell proposed a platform under the UNFCCC to facilitate discussions and collaborations on common guidelines for sustainable finance definitions.


Equity and Ambition: Sharing the Burden of Emissions Reduction

Yann Robiou du Pont provided insights contrasting the aspirational nature of the SDGs with the legally binding framework of the Paris Agreement. He emphasised the Agreement’s goal of limiting global warming to 1.5°C and the principle of “common but differentiated responsibilities and capabilities.” Presenting data on current emission trajectories, du Pont stressed the inadequacy of existing policies and advocated for equitable distribution of emissions reductions among nations. He introduced the concept of “fair share” based on historical emissions, per capita emissions, and GDP per capita, highlighting a study that assessed countries’ climate targets based on these factors.


From Disputes to Solutions: Charting a Course for Effective Climate Action

The discussion then delved into potential solutions, with Buier prompting the panellists to address disputes surrounding green finance taxonomies and the diversity of instruments involved. Du Pont underscored the importance of international support mechanisms and redistribution, while Carlitz emphasised transparency in traditional foreign aid channels like Official Development Assistance (ODA). Nagell shed light on the ongoing debates around green finance taxonomies, including the “gold standard” versus “traffic light” approaches and the need for comprehensive sustainability criteria.


Political Will and Beyond: A Multifaceted Approach to Climate Finance

The conversation transitioned to the role of political solutions, with Nagell stressing the need for continued international cooperation and leadership from high-emitting countries. Carlitz advocated for incorporating non-state actors and grassroots voices, while du Pont concurred that richer nations needed to step up their efforts.


Skepticism, Capitalism, and the Road Ahead

The session grappled with the complexities of climate change scepticism and its impact on green finance. Carlitz highlighted the need to understand its drivers and the challenges of achieving ambitious goals like those set by Agenda 2030 while avoiding top-down imposition. Nagell emphasised the influence of scepticism on investment environments and the necessity of utilising regulated capitalism to mobilise resources.


Conclusion: A Balancing Act for a Sustainable Future

The session on green transition finance at the SDG Conference in Bergen provided valuable insights into the challenges and opportunities in financing climate action. Speakers highlighted the need for transparent and equitable finance allocation, systemic changes in financial flows, and political solutions to address climate change effectively. The discussions underscored the complexity of transitioning to sustainable finance and emphasised the importance of collaboration and innovation in overcoming challenges.


The session’s insights align with existing research on climate finance, highlighting the importance of equity, transparency, and systemic changes in finance allocation. The emphasis on political solutions echoes calls for stronger political will and international cooperation to address climate change effectively. The discussions also have implications for future research, particularly in quantifying the finance required for additional emissions reductions and exploring innovative finance mechanisms to mobilise investments in sustainability.


As climate finance continues to be a critical component of global efforts to address climate change, the session’s emphasis on transparency, equity, and systemic changes offers valuable insights for policymakers, researchers, and practitioners. By addressing challenges such as scepticism, market fragmentation, and inadequate finance allocation, stakeholders can work towards mobilising investments in climate action and achieving sustainability goals.


For those who missed the session and would like to catch up, please watch the recorded session on GRIP’s YouTube channel or the video below: