Diplomacy & Defense Think Tank News

To facilitate FDI in developing countries, understanding technical and financial needs to transition from idea to adoption is vital.

To facilitate FDI in developing countries, understanding technical and financial needs to transition from idea to adoption is vital.

This paper empirically examines the link between the cost of sovereign borrowing and climate risk for 40 advanced and emerging economies. We find that vulnerability to the direct effects of climate change matters substantially more for sovereign borrowing costs than climate risk resilience. Moreover, the magnitude of the effect on bond yields is progressively higher for countries deemed highly vulnerable to climate change. Finally, a set of panel structural VAR models indicate that the reaction of bond yields to climate risk shocks become permanent after around 18 quarters, with high risk economies experiencing the largest permanent effects on yields.

This paper empirically examines the link between the cost of sovereign borrowing and climate risk for 40 advanced and emerging economies. We find that vulnerability to the direct effects of climate change matters substantially more for sovereign borrowing costs than climate risk resilience. Moreover, the magnitude of the effect on bond yields is progressively higher for countries deemed highly vulnerable to climate change. Finally, a set of panel structural VAR models indicate that the reaction of bond yields to climate risk shocks become permanent after around 18 quarters, with high risk economies experiencing the largest permanent effects on yields.

This paper empirically examines the link between the cost of sovereign borrowing and climate risk for 40 advanced and emerging economies. We find that vulnerability to the direct effects of climate change matters substantially more for sovereign borrowing costs than climate risk resilience. Moreover, the magnitude of the effect on bond yields is progressively higher for countries deemed highly vulnerable to climate change. Finally, a set of panel structural VAR models indicate that the reaction of bond yields to climate risk shocks become permanent after around 18 quarters, with high risk economies experiencing the largest permanent effects on yields.

The 2030 Agenda with its Sustainable Development Goals (SDGs) and the Paris Agreement on climate change were adopted in 2015. Although independently defined, the two agreements are strongly interlinked. We developed a framework that scores the impacts of climate-change actions on all SDG targets based on directionality (i.e., trade-offs or co-benefits) and likelihood of occurrence (i.e., ubiquitous or context-dependent), and categorizes them by dependence on four key context dimensions—geographical, governance, time horizon and limited natural resources. Through an extensive literature review, we found that climate-change mitigation measures directly affect most SDGs and their targets, mostly through co-benefits. Improving energy efficiency, reducing energy-services demand and switching to renewables provide the most co-benefits. In contrast, carbon capture and storage and nuclear energy likely lead to multiple trade-offs. We show how understanding the relevant context dimensions facilitates policy design and policy mixes that enhance co-benefits and minimize trade-offs. Finally, by assessing the prevalence of climate-change mitigation measures in G20 countries, we found that measures with more co-benefits are more frequently adopted. Our study advances the knowledge of climate–SDG interactions, contributing to climate and sustainable development governance research, and facilitating policy design for a joint implementation of the Paris Agreement and the 2030 Agenda.

The 2030 Agenda with its Sustainable Development Goals (SDGs) and the Paris Agreement on climate change were adopted in 2015. Although independently defined, the two agreements are strongly interlinked. We developed a framework that scores the impacts of climate-change actions on all SDG targets based on directionality (i.e., trade-offs or co-benefits) and likelihood of occurrence (i.e., ubiquitous or context-dependent), and categorizes them by dependence on four key context dimensions—geographical, governance, time horizon and limited natural resources. Through an extensive literature review, we found that climate-change mitigation measures directly affect most SDGs and their targets, mostly through co-benefits. Improving energy efficiency, reducing energy-services demand and switching to renewables provide the most co-benefits. In contrast, carbon capture and storage and nuclear energy likely lead to multiple trade-offs. We show how understanding the relevant context dimensions facilitates policy design and policy mixes that enhance co-benefits and minimize trade-offs. Finally, by assessing the prevalence of climate-change mitigation measures in G20 countries, we found that measures with more co-benefits are more frequently adopted. Our study advances the knowledge of climate–SDG interactions, contributing to climate and sustainable development governance research, and facilitating policy design for a joint implementation of the Paris Agreement and the 2030 Agenda.

The 2030 Agenda with its Sustainable Development Goals (SDGs) and the Paris Agreement on climate change were adopted in 2015. Although independently defined, the two agreements are strongly interlinked. We developed a framework that scores the impacts of climate-change actions on all SDG targets based on directionality (i.e., trade-offs or co-benefits) and likelihood of occurrence (i.e., ubiquitous or context-dependent), and categorizes them by dependence on four key context dimensions—geographical, governance, time horizon and limited natural resources. Through an extensive literature review, we found that climate-change mitigation measures directly affect most SDGs and their targets, mostly through co-benefits. Improving energy efficiency, reducing energy-services demand and switching to renewables provide the most co-benefits. In contrast, carbon capture and storage and nuclear energy likely lead to multiple trade-offs. We show how understanding the relevant context dimensions facilitates policy design and policy mixes that enhance co-benefits and minimize trade-offs. Finally, by assessing the prevalence of climate-change mitigation measures in G20 countries, we found that measures with more co-benefits are more frequently adopted. Our study advances the knowledge of climate–SDG interactions, contributing to climate and sustainable development governance research, and facilitating policy design for a joint implementation of the Paris Agreement and the 2030 Agenda.

This paper empirically examines the reaction of global financial markets across 38 economies to the COVID-19 outbreak, with special focus on the dynamics of capital flows across 14 emerging market economies. The effectiveness of fiscal and monetary policy responses to COVID-19 is also tested. Using daily data over the period January 4, 2010 to August 31, 2020, and controlling for a host of domestic and global macroeconomic and financial factors, we use a fixed effects panel approach and a structural VAR framework to show that emerging markets have been more heavily affected than advanced economies. In particular, emerging economies in Asia and Europe have experienced the sharpest impacts on stock, bond and exchange rates due to COVID-19, as well as abrupt and substantial capital outflows. Quantitative easing and fiscal stimulus packages mainly helped to boost stock prices, notably for advanced and emerging economies in Asia. Our findings also highlight the role that global factors and developments in the world's leading financial centers have on financial conditions in EMEs. Importantly, the impact of COVID-19 related quantitative easing measures by central banks in advanced countries extended to EMEs, with significant positive spillovers to EME stock markets in Asia, Europe and Latin America. Going forward, while the ultimate resolution of COVID-19 may be expected to lead to a market correction as uncertainty declines, our impulse response analysis suggests that there may be persistent effects on bond markets in emerging Europe and on EME capital flows.

This paper empirically examines the reaction of global financial markets across 38 economies to the COVID-19 outbreak, with special focus on the dynamics of capital flows across 14 emerging market economies. The effectiveness of fiscal and monetary policy responses to COVID-19 is also tested. Using daily data over the period January 4, 2010 to August 31, 2020, and controlling for a host of domestic and global macroeconomic and financial factors, we use a fixed effects panel approach and a structural VAR framework to show that emerging markets have been more heavily affected than advanced economies. In particular, emerging economies in Asia and Europe have experienced the sharpest impacts on stock, bond and exchange rates due to COVID-19, as well as abrupt and substantial capital outflows. Quantitative easing and fiscal stimulus packages mainly helped to boost stock prices, notably for advanced and emerging economies in Asia. Our findings also highlight the role that global factors and developments in the world's leading financial centers have on financial conditions in EMEs. Importantly, the impact of COVID-19 related quantitative easing measures by central banks in advanced countries extended to EMEs, with significant positive spillovers to EME stock markets in Asia, Europe and Latin America. Going forward, while the ultimate resolution of COVID-19 may be expected to lead to a market correction as uncertainty declines, our impulse response analysis suggests that there may be persistent effects on bond markets in emerging Europe and on EME capital flows.

This paper empirically examines the reaction of global financial markets across 38 economies to the COVID-19 outbreak, with special focus on the dynamics of capital flows across 14 emerging market economies. The effectiveness of fiscal and monetary policy responses to COVID-19 is also tested. Using daily data over the period January 4, 2010 to August 31, 2020, and controlling for a host of domestic and global macroeconomic and financial factors, we use a fixed effects panel approach and a structural VAR framework to show that emerging markets have been more heavily affected than advanced economies. In particular, emerging economies in Asia and Europe have experienced the sharpest impacts on stock, bond and exchange rates due to COVID-19, as well as abrupt and substantial capital outflows. Quantitative easing and fiscal stimulus packages mainly helped to boost stock prices, notably for advanced and emerging economies in Asia. Our findings also highlight the role that global factors and developments in the world's leading financial centers have on financial conditions in EMEs. Importantly, the impact of COVID-19 related quantitative easing measures by central banks in advanced countries extended to EMEs, with significant positive spillovers to EME stock markets in Asia, Europe and Latin America. Going forward, while the ultimate resolution of COVID-19 may be expected to lead to a market correction as uncertainty declines, our impulse response analysis suggests that there may be persistent effects on bond markets in emerging Europe and on EME capital flows.

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Failure at multiple levels of governance rather than the resource base itself is at the origin of the water crisis. Despite increasing scholarly research on water governance and efforts towards policy reform the overall situation has not substantially improved and major transformations in water governance are yet to be implemented. The chapter summarises and addresses multi-level and multi-sectoral challenges for water governance by reviewing and discussing several key concepts in science and policy. An analysis of basin scale approaches and their effectiveness and a discussion of the importance of scale and of multi-level governance approaches shows that crossing boundaries is essential to tackle complexities of sustainable water governance and management. The concept of the WEF nexus is introduced and critically analysed concerning its potential to overcome sectoral fragmentation and sectoral power imbalances. Crossing boundaries also implies governance across national borders. The sub-chapters on transboundary water management and on global water governance address these international and global dimensions. Overall, the chapter highlights from different perspectives the importance of linking and of governing across scales from the local to the international and global.

Failure at multiple levels of governance rather than the resource base itself is at the origin of the water crisis. Despite increasing scholarly research on water governance and efforts towards policy reform the overall situation has not substantially improved and major transformations in water governance are yet to be implemented. The chapter summarises and addresses multi-level and multi-sectoral challenges for water governance by reviewing and discussing several key concepts in science and policy. An analysis of basin scale approaches and their effectiveness and a discussion of the importance of scale and of multi-level governance approaches shows that crossing boundaries is essential to tackle complexities of sustainable water governance and management. The concept of the WEF nexus is introduced and critically analysed concerning its potential to overcome sectoral fragmentation and sectoral power imbalances. Crossing boundaries also implies governance across national borders. The sub-chapters on transboundary water management and on global water governance address these international and global dimensions. Overall, the chapter highlights from different perspectives the importance of linking and of governing across scales from the local to the international and global.

Failure at multiple levels of governance rather than the resource base itself is at the origin of the water crisis. Despite increasing scholarly research on water governance and efforts towards policy reform the overall situation has not substantially improved and major transformations in water governance are yet to be implemented. The chapter summarises and addresses multi-level and multi-sectoral challenges for water governance by reviewing and discussing several key concepts in science and policy. An analysis of basin scale approaches and their effectiveness and a discussion of the importance of scale and of multi-level governance approaches shows that crossing boundaries is essential to tackle complexities of sustainable water governance and management. The concept of the WEF nexus is introduced and critically analysed concerning its potential to overcome sectoral fragmentation and sectoral power imbalances. Crossing boundaries also implies governance across national borders. The sub-chapters on transboundary water management and on global water governance address these international and global dimensions. Overall, the chapter highlights from different perspectives the importance of linking and of governing across scales from the local to the international and global.

Since the pandemic began, the debt situation in Sub-Saharan Africa (SSA) has been further exacerbated as the pandemic has constrained the ability of many countries to mobilise revenues; it has also raised public  sector financing requirements. To close the financial gap, countries in SSA need short-term and long-term liquidity from a wide range of financiers. The G20 assumes a crucial role in resolving debt problems in SSA as the only forum that encompasses the governments of Africa’s most important creditors among industrialised countries and emerging markets. The G20 can help by: (a) operationalising, in the shortterm, the Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative (DSSI) and linking it to sustainable development; (b) supporting robust replenishments of the concessional windows of the International Development Association (IDA) and the African Development Fund (ADF) and a new allocation of Special Drawing Rights (SDRs) for low-income countries (LICs); (c) enhancing capacity building for domestic resource mobilisation in LICs through the development of financial sectors and public financial management; and (d) developing a set of critical indicators for CRAs that can easily be compared across countries and can stand the test of time and changing risk profiles.

Since the pandemic began, the debt situation in Sub-Saharan Africa (SSA) has been further exacerbated as the pandemic has constrained the ability of many countries to mobilise revenues; it has also raised public  sector financing requirements. To close the financial gap, countries in SSA need short-term and long-term liquidity from a wide range of financiers. The G20 assumes a crucial role in resolving debt problems in SSA as the only forum that encompasses the governments of Africa’s most important creditors among industrialised countries and emerging markets. The G20 can help by: (a) operationalising, in the shortterm, the Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative (DSSI) and linking it to sustainable development; (b) supporting robust replenishments of the concessional windows of the International Development Association (IDA) and the African Development Fund (ADF) and a new allocation of Special Drawing Rights (SDRs) for low-income countries (LICs); (c) enhancing capacity building for domestic resource mobilisation in LICs through the development of financial sectors and public financial management; and (d) developing a set of critical indicators for CRAs that can easily be compared across countries and can stand the test of time and changing risk profiles.