Development Banks and the Green Transition

The greatest challenge humanity faces in the 21st century is the climate crisis. A successful green transition towards a sustainable economy requires various policy initiatives including promoting innovation, financing, tax incentives for selected activities, cheap credit, and subsidies. To achieve these aims, a massive redistribution of capital will be necessary requiring cooperation between public and private sectors, states, and civil society. This book introduces the idea of a 'Sustainable Development Convention'. A convention is a form of social production and shared knowledge that establishes collective reality. The Sustainable Development Convention is proposed in opposition to the neoliberal convention according to which pure market coordination is superior to state coordination. The Sustainable Development Convention intends to effect a radical change in both the mission and actions of the state, developing new economic policy tools and institutions focusing on the green transition. In particular, the transition calls for a complete reordering of financial systems and capital flows, making the actions of development banks ever more critical. Development banks have been essential institutions in promoting public policies worldwide - their credit and other forms of finance and cooperation have been central tools in catching-up processes for developing and emerging economies. In times of structural change, such as the green transition, development banks are required to play a central role. This book marks a significant addition to the literature on development banks, the green transition, the political economy of climate change, and economic and monetary policy.