Green Central Banking shares its top picks for reading on climate finance

Forget the beach. It’s too damn hot. Instead, head to a cool air conditioned room and dig into how finance is shaping – or not – the heat – or cold – you are experiencing because of climate change.

The Green Central Banking team offers our picks for some fascinating books on the climate and finance to delve into, plus some research offerings that push the envelope of thinking on green finance.

Books

The Meddlers: Sovereignty, Empire and the Birth of Global Economic Governance by Jamie Martin. Martin’s forensic history traces the origins of global financial institutions such as the World Bank and the International Monetary Fund, which emerged from the chaos of World War I and are now firmly embedded in the center of our geopolitical framework. It’s also an exploration of the nature of national sovereignty and asks the question: who decides the rules underpinning the global economy, and who benefits? Fascinating stuff.

Five Times Faster by Simon Sharpe is a manifesto for picking up the pace on tackling climate change. Sharpe echoes many of the same points made by Green Central Banking contributors, in particular that economists vastly underestimate the risks associated with global heating and that there are economic tipping points that will trigger rapid shifts in the uptake of low-carbon technologies. Above all, Sharpe suggests that, despite decades of misinformation and delay, there is still hope.

The Routledge Handbook of Green Finance edited by Othmar M. Lehner, Theresia Harrer, Hanna Silvola, and Olaf Weber. This comprehensive tome is the ultimate green finance bible. From sustainable investing to green bonds, this first edition has got everything you need to navigate the evolving landscape of sustainable finance. It brings together insights from leading scholars and offers new thinking in topics such as regulation, accounting, and reporting. It’s the perfect companion for those looking to deepen their understanding of green finance, a must-have for your professional bookshelf.

Stories of Social (In)equity in Nature-based Solutions by Ida NS Djenontin, Karen Esler, and others. As nature-based solutions grow in popularity, various stakeholders — particularly in the global south — are raising concerns about their misuse or misguided application. This collection of illustrated short stories brings local voices to the fore to illuminate factors that constrain or enable social equity in nature-based solutions from a bottom-up perspective. It’s a valuable read for those engaged in funding, regulating or designing nature-based solutions.

Charleston: Race, Water, and the Coming Storm by Susan Crawford. Millions of Americans will likely need to move away from coastlines due to increasing sea levels. In this case study, Harvard law professor Susan Crawford looks at the impact that climate change and government failure could have on Charleston, South Carolina. She makes a plea for climate justice, laying out how the city (and by extension the US) can ensure a just transition.

Treasure Islands: Dirty Money, Tax Havens and the Men Who Stole the World by Nicholas Shaxon. There’s something jaw-dropping on most pages of this account of how we ended up with an economy in which more than half of world trade passes through tax havens. If you’re looking for a history of the offshore world that reads like a spy thriller, this book by veteran British financial journalist Nicholas Shaxon should do the job.

Barons: Money, Power, and the Corruption of America’s Food by Austin Frerick. Food is estimated to account for around a quarter of global emissions, so there’s plenty to be gained by better understanding the systems behind what lands on our plates. For a book about how monopolies have ruined the US food industry and what can be done about it, this debut from agricultural and antitrust expert Austin Frerick is a remarkably enjoyable read.

Research and reports

Loading the DICE against pension funds by Steve Keen On the surface, this is a report about how “flawed economic thinking on climate has put your pension at risk.” More broadly, it’s one of the most eloquent critiques yet written about how mainstream economics has failed (thus far) to incorporate the findings of climate scientists into its models. One to send to the economist in your life who needs a little convincing that the discipline needs to change.

Climate Scorpion: The Sting is in the Tail by Sandy Trust, et al. The earth’s climate might be more sensitive than originally thought. This report from the Institute and Faculty of Actuaries looks at the complexity of climate risks and introduces the concept of a planetary solvency to assess nature, climate and societal risks.

Rising Temperatures, Falling Ratings: The Effect of Climate Change on Sovereign Creditworthiness by Patrycja Klusak, et al. What impact will climate change have on sovereign borrowing costs? Find out more in this academic article which reads more like a financial thriller. Using machine learning, researchers simulate the effects of rising emissions on sovereign creditworthiness. The results? Climate-induced sovereign downgrades will emerge by the end of the decade. But there’s a glimmer of hope – honoring the Paris Agreement could “nearly eliminate the effects” according to the authors.

Net Zero Central Banking in Africa’s Diverse Economies: Challenges, Opportunities and Policy Options by Reuben Wambui, Joseph Feyertag and Pierre Monnin. Africa’s central banks take center stage in this nuanced exploration of net-zero opportunities and challenges emerging across the continent’s diverse economies. Despite Africa’s significant renewable energy potential, biodiversity hotspots,and critical minerals, low-value exports and resource over-exploitation are constraining the benefits from these valuable assets. Emphasizing the need for nationally tailored solutions, the report says that African central banks can seize this “defining moment” by leveraging their assets and implementing measures to address climate risk.

Insuring Disaster 2024 by Abhijay Sood, et al. Ever wondered how your insurance premium might be fuelling climate change? This eye-opening exposé from ShareAction delves into the role of the insurance industry and reveals that the world’s largest insurers continue to underwrite and finance environmentally harmful activities, despite facing skyrocketing climate-related losses. Insurers are also withdrawing from high-risk areas in response to such losses, creating a widespread “insurance protection gap.“ The report makes suggestions for improving the resilience of the sector and the wider economy.

The Economic Commitment of Climate Change by Maximilian Kotz, Anders Levermann and Leonie Wenz. Brace yourself for a sobering yet essential perspective on our economic future with this quantitative deep-dive into the near-term costs of climate change. The authors use cutting-edge analysis to estimate the economic impact of already produced greenhouse gas emissions. They project a jaw-dropping 19% global income slash within 26 years resulting from past emissions alone. The price tag? A cool $38 trillion annually by 2050.

Financial Innovation for Climate Justice: Central Banks and Transformative ‘Creative Disruption’ by Jennie Stephens and Martin Sokol. Central banks as climate heroes? This provocative read explores how these traditionally conservative institutions can lead the charge in climate finance innovation. The authors argue central banks should spearhead the “creative disruption” of monetary policy, including the notion of market neutrality, to avoid climate-induced events triggering the next global financial crisis. A must-read for central bankers and finance professionals looking to push the boundaries of their institutions’ climate action.

Just Transition: A Climate, Energy and Development Vision for Africa by Youba Sokona, et al. This report from the Independent Expert Group on Just Transition and Development outlines a bold vision for the continent’s sustainable future, advocating for a just transition to clean energy that leapfrogs fossil fuels altogether. The report explores innovative financing strategies to overcome the structural post-colonial economic obstacles faced by the region and promote strategic investments in key sectors, such as renewable energy manufacturing. It’s essential reading for policymakers and investors interested in the economics of a just transition across Africa and the wider global south.