Watch the recording
On 29 June, E3G convened an Experts Discussion Panel in the context of London Climate Action Week to explore the impact of the Russia-Ukraine war and the unprecedented weaponisation of the financial system for the stability of the international rules-based order, the ability of the global financial architecture to deliver the financing needed for net zero, and the role of emerging markets and developing economies in shaping that future.
The panel which was moderated by E3G’s Associate Director for Clean Economy Ronan Palmer, included:
- Sony Kapoor, Managing Director, Nordic Institute for Finance, Technology, Sustainability and Society; Professor of Climate, Geoeconomics, and Finance, Schuman Centre for Advanced Studies, European University Institute
- Mona Ali, Associate Professor of Economics, State University of New York – New Paltz
- Cary Krosinsky, Lecturer, Yale and Brown Universities; Co-Founder, Sustainable Finance Institute
- Franklin Steves, Senior Policy Advisor for Sustainable Finance, E3G
The discussion ranged across a wide array of geopolitical and geo-economic factors driving rapid shifts in the global networks of trade and investment. The panel agreed on the historical scope of the changes we’ve seen since the 24th of February – including the profound shocks to supply chains that will have major implications for the net zero transition. The declining goodwill and rising tensions between the Global North and South, which had their roots in a lack of solidarity during the COVID-19 crisis and the failure to deliver on the $100bn commitment in the Paris Accord, risk becoming entrenched.
The panel then discussed the prospects for cooperation or competition in a context in which Russia and China have taken steps to reduce their exposure to the US dollar and the BRICS have renewed discussions about expanding the grouping to provide an alternative to the G20. While current multilateral institutions are not really up for the task ahead of them, the panel concurred that the creation of a new, functional international system is simply not feasible, particularly in the timeframe left for concerted climate action.
Whether the international order retains some coherence or splits into blocs, the Global South is likely to be much more decisive in the future shape of that order than it has in the past. And the political and social pressure exerted by the physical impacts of climate would be a decisive factor – and would likely push governments toward some form or coordination. Finally, one of the great unknowns is whether any future realignment of the global macrofinancial system would result in positively competing or destructively conflictual blocs. This is an area in which the right kinds of foreign and economic climate policies could be decisive.