These challenging objectives and questions are being explored by an informal network of public finance officials, economists and financial theorists in a proposed Advisory Finance Group. The Group will be composed principally of experienced practitioners from the public finance community – including directors of ministries of finance, central banks, financial regulatory agencies, and development finance institutions – and supported by economists and financial strategists recognized for leading expertise on investment productivity and by analysis groups in all regions to specify locally adaptive applications of these programs.
The conceptual framework of the Advisory Finance Group inverts the logic of climate change analysis. It begins not with climate change as an environmental issue, but rather with financial problems central to macroeconomics and growth. We already have a reasonable idea what expanded and targeted public investments in low carbon infrastructure can contribute to meeting climate goals. What we need now to understand is whether investment in sustainable infrastructure has credible productivity potential greater than other plausible claims upon increased public funding. In a world caught up in prolonged macroeconomic stagnation, the primary mandate of financial officials is to define and deliver the fiscal and monetary options that can lift investor expectations of long-term growth.
Without such long-term growth, climate change will remain trapped in good intentions, with an increasing gap between what we know is needed and what is achieved on the ground.