Picture full of Greenery: A critical analysis of Brazilian Food and Housing Market (Part-1).
Ayesha Umar. ALL RIGHTS ARE RESERVED.
A key question to ask about the development of green, inclusive finance is whether this will lock-in infrastructure planning and development to our prevailing dependence on both fossil fuels and debt (e.g., continued car usage, sprawling urban living, and rising liquid energy consumption, etc.) or will it promote sustainable, climate resilient infrastructure. All this leads to questions like does does financial institutions in Brazil have clear regulations, taxonomy, and multilateral co-operation to promote sustainable banking. Moreover, who is setting the financial and societal priorities for the promotion and development of sustainable banking and climate resilient infrastructure; what kind of basic science is getting funded and why; how are various supply chains are integrated into developing regional clusters and infrastructure planning; and how various projects are valued for sustainable investment and how much materiality (i.e., energetic and biophysical characteristics) is considered to disrupt the already existing infrastructure. Altogether such questions highlight the uncertainty underlying a transition that ensures that a country that:
A country that can print its own money can never go into debt. However, how it spends the money and other borrowed resources leaves lots of questions unanswered.
and the need to understand how this transition is being imagined, driven, and disrupted.
The need for green inclusive finance has always been imminent for countries like Brazil-where stark class difference is visible than anywhere else. This has also given rise to financial fraud and issues related to compliance and then creation of a creative class which will be oblivious of the events around them. This calls for researchers to research on why so much trickery and uncle. There is a institutional impacts of the sovereign debt and inclusive green finance on infrastructural planning. Therefore, following are the research objectives of this proposed project:
1- To analyze the policy visions, narratives, and priorities underpinning the sovereign debt and sustainable finance in Pakistan?
a- What different types of banking products and services i.e., green bonds, mortgages etc. are discursively framed by the central bankers, urban developers, and other publics for just transition in Pakistan?
b- What have been the implications of the sustainable finance policies for other countries i.e., Germany, Canada, and China?
2- To examine the political economic and ecological processes involved in advancing the urban development (i.e., from bank to living)?
a- How different economic, environmental, and political actors (i.e., capital investors, government officials, urban developers, engineers, construction industry representatives, etc.) in the network configure the supply chain?
3- To identify the various transition risks (i.e., physical, and energetic) constraining the development, and commercialization of sustainable finance?
a- How natural (weather, availability of land), technological advancements (introduction of hybrid cars), limit the integration of sustainable finance products into existing banking system?
This project will make a major contribution in understanding the socio-economic materialities associated with the promotion of urban development by analyzing the sustainable finance products and services along with the system innovation. Up till now, the scholars have worked on the socio-political dimension of the urban development. However, with financial constraints and the environmental catastrophes becoming frequent; there is a growing need to explore the financial side of the just transition towards low carbon society (Dikau & Volz, 2019). Moreover, this study will be an attempt to define what is sustainable finance? And what does it mean when it comes to urban development in the Global South in an indebted country? In other words, developing a nature and market nexus in Pakistani context while reviewing the policies related to both urban development and sustainable finance around the world.
Undoubtedly, we are falling behind when it comes to stabilizing the anthropogenic climate crisis-reducing GHG emissions-funding technological advancement while creating opportunities for reginal development (Volz, 2020). For example, according to the IPPC’s recent report the world is bound to become 1.5-degree warmer withing 20–30 years (IPCC-2018). Given that the need to make a transition to a low-carbon and climate resilient society is imminent. Over the last few years, green inclusive finance has been promoted as one such financial solution to environmental problems, especially within the Global North where it is being associated with the mitigation and adaptation of climate change (Umar, forthcoming 2022).
Green finance refers to the financial tools through which various adaptation and mitigation efforts are supported. With these tools (i.e., green bonds, digital finance) capital is raised to channel funding into green or climate friendly projects-including people at the bottom of the pyramid especially women who do not have access to collateral, lessening the social inequality and tensions-all the while making a transition towards low carbon and climate resilient economy (Umar, forthcoming 2022).
Green inclusive finance holds considerable potential for countries like Pakistan, and are considered as the primary pathway for a sustainable transition from a fossil fuel based economy (dependent on finite, polluting resources) to a low-carbon economy (dependent on renewable, and clean resources) (Khan, 2019; Dikau, Robbins & Volz, 2020). As with most new financial regulations, however, the development and promotion of green, inclusive finance is being driven by prevailing social, institutional and infrastructure pressures.
For example, Pakistan is a heavily indebted country besides being the 8th most climate vulnerable in the world. In few decades, it has lost around 1,000 lives, experienced 152 extreme weather events with economic loss worth $3.8 billion. On the other hand, Pakistan has also expanded its mangrove forests, and invested in early warning systems, climate proofed flood-prone infrastructure and established cross-country disaster management networks and has created approximately 85,000 jobs. However, climate adaptation comes with a hefty price tag of about 6% of the annual federal budget−a challenge for a country that owes around $44.9 trillion as of December 2020 to different creditors. It is important to note that Pakistan has paid a
The analytical framework for this proposed project is based upon world systems−keeping the socio-political and economic context of Brazil, its increasing geographical importance and climatic vulnerability. Since, our institutions operate in public and social spheres, therefore, it is necessary to address both the formal and informal norms and dynamics that govern them (Khan, 2019). Therefore, there is a need to examine the “processes of institutionalization” (pg. 175) of green finance and the role played by the regulators and other actors since institutions are formed and governed by various norms, dynamics, socio-political and economic beliefs, and behaviors (Tolbert & Zucker, 1996). Simply put, green finance is still a nascent concept which means that institutions involved in it lack the knowledge needed to implement climate-sensitive measures (Weber & Feltmate, 2016).
Although, sustainable finance products and services have only recently appeared in the market, they have attracted a great deal of public attention. With the ability to mitigate and adapt to the risks posed by climate change, sustainable finance policies aligned with Paris Agreement are much needed in Pakistan. Therefore, the suggested project seeks to answer three questions:
1- How interest rates in Pakistan are determined, and how much environmental risks shape the financial risks?
2- How social priorities are defined when it comes to buying real estate and what is the contribution of climate activists in it?
3- How environmental, social and governance criteria provide efficient, and predictive financial analytics for policy making?
The proposed project is split into three stages and builds on research by the applicant, but also goes beyond her previous research by exploring how existing socio-economic and technical systems shape and configure urban development. Moreover, the research will complement the applicant’s previous research, which was on Canada, because it focuses on Pakistan.
1- In the first stage discursive framing of the financial policy visions, narrative, and strategies in Pakistan will be reviewed (Dittmer, 2010).
a- For this, secondary resources produced by relevant policy makers, NGOs, and private industry will be used.
b- 15 interviews split equally between government, NGOs, and private industry will be conducted. Interviews will be identified from organizational websites, publications, and industry events. Moreover, both purposive and snow-ball sampling techniques will be used.
c- Methodological Justification: Policy visions provide an insight into policy-making strategies, goal, and tensions across different scales of environmental and economic governance. The analysis will tease out contentious and ambiguous aspects of key concepts used to frame the promotion and support for the green, inclusive finance e.g., what are economically and environmentally sustainable projects? How do these accounts link current valuations to future valuations of them?
2- Focus group:
a- Participants will be policy makers, homeowners, NGOs, and private industry with more than 15 years of experience in their relevant fields (McDowell, 2010).
b- Methodological Justification: Focus group discussions stimulate ideas and memories that can not be captured in either policy papers, or interviews.
3- A bilingual, national survey will be developed using the assumptions in existing literature and data collected through interviews and focus groups on financial risks and determinants of climate risks management in various jurisdictions (Charmaz, 2010).
a- Methodological Source and Justification: The survey will be conducted among a representative sample of the Pakistanis living in various housing schemes to know how many of them are aware of the consequences of climate change and sustainable finance? And their willingness to invest/borrow green finance products and services.
4- I also intend to use vulnerability indicator produced by Standard & Poor’s and Moody’s to determine country risks resulting from climate change. This indicator is based on the following three parameters:
i- The Notre Dame University Global Adaptation Index (ND-Gain Index). This index is comprised of more than 30 variables developed by Kling et al. (2020), which in determining the impact consider both the effects of climate change, as well as the economic resilience of countries.
ii- The percentage of the population that lives in areas where elevation is below 5 meters, as an indicator of the vulnerability to rises in sea level and flooding. This is derived from the World Bank Data.
iii- Agriculture as a percentage of gross domestic product. Derived from the World Bank Data.
iv- Conducting vulnerability assessment covering all sources of vulnerability for the macroeconomy, the financial system, and public finances are systematically evaluated. Vulnerability assessment should comprise a scenario analysis of climate and socioeconomic change and address both physical and transition risks (Umar, forthcoming, 2022).
Methodological Source: This will include the central bank and supervisors along with government officials, academics, NGOs, and other publics.
Methodological Justification: The vulnerability assessment should form the basis for a number of subsequent, coordinated actions aimed at mitigating and managing climate-related sovereign risks (Langley, 2020).