The Advisory Finance Group (AFG) is a project to provide technical support to a group of central banks, finance ministers, and development finance institutions to integrate climate concerns into fiscal and monetary policy. AFG presupposes that most climate risk will eventually be borne by sovereign governments. Traditional climate advocacy has sought to ameliorate this risk through fiscal (carbon pricing, etc.) and regulatory means. The continuing failure of nation states to enact fiscal climate solutions (to say nothing of the gridlock around fiscal solutions to the 2008 financial crisis) has lead the AFG to propose the development of central bank/monetary-driven risk-based approaches. The theory posits that quantifying and assigning risks to public and large private asset classes would be analogous to carbon pricing mechanisms. In addition, policy success might be easier to achieve at the central bank level rather than through legislative bodies. One key element would be the creation of new AI tools to replace the equilibrium-based tools currently in use to quantify and assign risk.
About the Grantee
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Grants to this Grantee
for a comprehensive platform to track commitments and actions of global financial institutions
Climate Policy Initiative will expand the scope and reach of their existing data platform, which provides the most comprehensive assessment of global financial institutions’ progress toward net-zero. This will drive greater transparency and accountability to support the decarbonization of the financial sector. The data platform will capture the progress made at COP27 and help frame the discussion ahead of COP28. (Substrategy: Multilateral)
for the India Clean Energy Finance Initiative
This grant will support the Climate Policy Initiative’s India Clean Energy Fund. This fund will support grantees who seek funding from the U.S. government’s Overseas Private Investment Corporation to develop distributed and rooftop solar business models for the purpose of reducing air pollution from power plants and expanding electricity access to underserved and poverty-stricken areas of India. The grants provide resources to meet the business and environmental guidelines of the U.S. government, and leverage more than $400 million to expand rooftop and off-grid clean energy in India.