Tag: Multilateralism

Unsettling Epistemologies of Climate Finance for Critical Just Transitions

Farwa SialLeave a comment

Celine Tan and Paul Gilbert*

2026 has brought the urgency of just transitions to the fore across different registers. This year has witnessed the capitals of global finance and postcolonial economic expansion in Europe and North America face unprecedented heatwaves and droughts. The US-Israel war on Iran continues to choke shipping traffic through the Strait of Hormuz and disrupt oil and gas production in the Gulf states. These events have underscored the social, economic and ecological vulnerability inherent in a fossil fuel-based global economy and highlighted the perils of disorderly transitions at the very moment when international law and policymaking arenas have opened up spaces for conversations on just, orderly and equitable transitions and how to finance them.

The 30th meeting of the United Nations Framework Convention on Climate Change (UNFCCC) Conference of Parties in Belém, Brazil in November last year launched a process to establish a Just Transition Mechanism (JTM), a focal point for supporting countries transition to decarbonised and climate resilient futures in a just and equitable manner. In parallel, the COP30 Presidency developed a Roadmap on Transitioning Away from Fossil Fuels (TAFF) with the aim of ‘advancing concrete action and deepening the discussions initiated at COP30 in Belém and ‘to build a shared understanding of the transition’. At the same time, a coalition of states, subnational governments and civil society groups led by Colombia and the Netherlands had initiated the high-profile First Conference on Transitioning Away from Fossil Fuels in Santa Marta, Colombia (the Santa Marta Conference) to accelerate the global transition away from fossil fuel dependence in ‘a just, orderly and equitable manner’.

Finance as an Enabler of Climate Action

A crucial aspect of the legal, policy and political climate negotiations is the question of finance, a fundamental means for states to implement their commitments on mitigating and adapting to climate change, redressing the loss and damage of climate impacts and implementing just transition pathways. Financial resources, along with technical assistance and technology transfer, are key to ensuring that the costs and benefits of local and global transitions to low-carbon and climate resilient economies and societies are distributed fairly across countries and communities. Alongside green technologies and capital investments for the energy transition and shoring up infrastructure to withstand climatic impacts, finance is also required to fund social safety nets, workforce training and deployment and ensuring stable and affordable energy access. This is necessary to ensure that the socio-economic transformation does not exacerbate existing social and economic inequalities and disparities within and between countries.

Finance operationalises the principle of ‘common but differentiated responsibilities and respective capabilities (CBDR-RC)’ that underpins the UNFCCC and other multilateral environmental agreements (MEAs). This principle recognises that while climate change is a shared concern for all states, different states have contributed to climate change unequally and have different financial, technological and institutional capacities to respond. Here, industrialised countries – which are disproportionately responsible for historical greenhouse gas (GHG) emissions, and which possess greater financial and technological resources – should take the lead in reducing GHG emissions and providing support to developing countries to undertake climate action).

The stark disparity in capacities to respond to disorderly transitions has been witnessed this year as the financial, economic and social impacts of the US-Israel-Iran war has demonstrated. According to the United Nations Conference on Trade and Development (UNCTAD), the disruption of shipping flows through the Straits of Hormuz have resulted in
higher energy, fertiliser and transport costs across the world, with impacts more acutely felt in developing countries, especially in countries struggling with high levels of external debt.

As demonstrated during other global crises, notably during the COVID-19 pandemic, developing countries lack the fiscal and policy space and limited resources to respond to global shocks in the same way as developed countries. Dependence on oil and gas imports, reliance on remittances (especially countries with high dependence on Gulf state migrant workers), and financial exposure to monetary policy responses in other countries (notably interest rate rises) place many developing countries in especially vulnerable positions when confronted with a sudden and disorderly shock to energy markets and supply of fossil fuel-based products.

Ideational Infrastructure of Climate Finance

The current overlapping economic, military and climate crises underscore the imperative of international efforts to operationalise a fair and equitable global just transition, with the modalities of finance being a core element of their success. It is crucial that the epistemic and operational roadmaps towards decarbonisation and climate resilience include financial means of implementation that are inclusive and emancipatory and respond to domestic conditions and circumstances. As a field of inquiry and a field of practice, financial concepts, methods, institutions and regulatory landscapes shape decision-making on climate action and just transitions.

Yet much of the literature on climate finance remain organised around the technocratic concern of how to close the ‘finance gap’ or the shortfall between resources needed and resources available to support climate action). Specifically, the focus on expanding the financial toolkit and on using public resources to mobilise, catalyse or ‘derisk’ private capital flows in order to plug this gap has effectively become hegemonic in policy discussions around climate action and achieving just transitions. Part of the process of attracting these climate flows relies on what Collington and Hasselbach have recently called ‘epistemic derisking’ or using authoritative knowledge and risk models to encourage private financial flows. All this dovetails with the ongoing implementation of what Gabor has coined the ‘Wall Street Consensus’, the global effort to ‘reorganize development interventions around partnerships with global finance’ and ‘escort’ global investors into development and environmental infrastructure asset classes.

The dominance of these approaches have tangible impacts on climate law and policymaking. The epistemic authority of mainstream climate finance organises and legitimises particular pathways for just transition that are ahistorical and neocolonial. The prevailing focus on market mechanisms – blended finance, green and blue bonds, debt swaps, carbon credits, and catastrophe bond instruments – as key solutions to scaling-up and fine-tuning the climate finance toolkit discounts broader structural challengesof debt, uneven development, unequal terms of trade, and asymmetrical global economic governance  as well as legacies of colonial extraction and exploitation. These regimes are reproduced and codified through legal infrastructures of the global market economy ) and are then reinforced through embedding within the multilateral climate regime.

Collectively, they form an ideational infrastructure of knowledge, expertise and power about climate finance that privilege certain constituencies (global north/ powerful/ private/ corporate) over others (global south/ vulnerable/ public/ community-centred). This epistemic architecture can and does influence negotiating trajectories and regulatory options within the multilateral climate regime. As Okonjo argues, the ‘ideological and performative role of ideas and their related technologies and practice’ both conceals the reproduction of inequality and power asymmetries between developing and developed countries as well as restricting ‘the regulatory possibilities’ available to global south law and policymakers. In other words, the debates around climate and just transition finance within the UNFCCC and other international law and policymaking fora can be foreclosed by epistemic capture that can and does privilege some groups while marginalising others. This, in turn, can lead to poor outcomes for developing countries at the sharp end of the climate crisis and foreclose broader sustainable development pathways.

For example, by presenting financialised, private sector-led, market-based finance as the only viable options for addressing the climate finance challenge to implementing multilateral climate commitments, developed countries have shifted away from commitments to ‘provide’ direct financial resources to developing countries to discharge their commitments under the Paris Agreement and instead focused on vague commitments to ‘mobilise’ them from a variety of sources instead of increasing the amounts of grant-based and concessional official finance..

Unsettling Climate Finance Epistemologies

The centrality of knowledge regimes to the framing of climate finance challenges and solutions within the international financial architecture and the multilateral climate regime renders it imperative that we map and understand the epistemic authority of climate finance and how its constituent elements shape law and policymaking for global climate action. Critical scholars have examined the epistemic geographies of climate science and knowledge gaps shaping climate law and policy . Less attention has been paid to epistemic ecosystems within which climate finance paradigms are authorised and governed.

It is crucial that we examine the epistemic foundations of climate finance and interrogate the knowledge politics, institutional logics, discursive frames and epistemological practices underpinning climate finance scholarship, law and policymakingto better understand how these dynamics and structures work to enable or constrain transformative just transitions in developing countries. There is an imperative to move away from treating the challenge of climate finance as a technical exerciseand instead, approach it as a terrain of legal, socio-political and economic contestationwhich needs to be unpacked for it to be effective.

The prospective impact of not critically unsettling these climate finance epistemologies can be deeply damaging to climate action and just transitions, especially in developing countries. For example, the Academic Dialogue at the aforementioned Santa Marta TAFF conference published a ‘menu of actions’ for global energy transition which included ‘Border Carbon Adjustments for traded energy intensive commodities,’ so as to allay concerns about carbon leakage and to ensure that ‘investments in clean industrial capacity thrive on an international level playing field’ (Santa Marta Action Repertoire (SMART)). This policy option is one that has been heavily contested by global south researchers, policymakers and other stakeholders for its potential to shift the terms of trade dramatically in favour of developed countries while doing very little to reduce global greenhouse gas emissions.

The reinforcement of historical and present-day realities of unequal global economic structures within climate policy prescriptions is unsurprising given the continued marginalisation of global south and critical voices from these sites of law and policymaking. Within a few days of the publication of the SMART document, an open letter was circulated criticising the organisers of the Academic Dialogue for lack of meaningful inclusion and representation from global south constituencies in the drafting of the SMART Synthesis Report and the monopoly of the process by a handful of global north academics.

This example of epistemic hierarchies is only one of many within the climate architecture. Trawling through Bilateral Transparency Reviews recording climate finance flows, or examining International Aid Transparency Initiative data on climate finance, reveals the extent to which a small handful of influential consultancy firms shape climate finance policy advice and instrument design.  Recent research has identified an overwhelming dominance of a handful of institutions, individuals and journals – primarily in the global north – shaping knowledge around just transitions. This epistemic capture of climate and climate policy and practiceby global north scholars, experts, institutions and networks steers discourses towards technical fixes over transformative structural social and political change and gatekeeping access to finance, with other recent work demonstrating how the widespread use of global north-based climate finance intermediaries steers developing country options toward donor priorities  and results in uneven distribution of financial resources.

The establishment of the aforementioned UNFCCC Just Transition Mechanism and parallel TAFF roadmaps and processes open up spaces in which mechanisms for financing just transitions are being actively designed and contested but these spaces are often established without a critical framework for scrutinising whose expertise are shaping those instruments. The marginalisation of global south knowledge and critical ideas within this architecture can undermine the legitimacy of norms and policy prescriptions produced within these spaces and create more gridlocks in multilateral climate governance.

The work to unsettle and decolonise climate finance epistemologies is therefore imperative because material effects are being acutely felt across the global south, where critical minerals extraction, battery supply chains, data centres and carbon markets are reshaping land use and resource access in countries with the least historic responsibility for but bear the greatest burden of climate change. But without paying close attention to the geographies and ecosystems of academics and consultants who shape climate finance instruments, there is a risk that the ‘menu’ of policy options considered essential for just and equitable transitions is one which in fact entrenches inequalities and hierarchies within the global economy, doing little more than greening empire.

* Celine Tan is Professor of International Economic Law, Warwick Law School, University of Warwick, UK and Paul Gilbert is Reader in Development, Justice and Inequality (Anthropology), School of Global Studies, University of Sussex.

In Memoriam – Óscar Ugarteche

Farwa SialLeave a comment

Lima, 1949 – Mexico City, 2026

Isabel Ortiz

Some deaths you never quite manage to take in, and this is one of them. Óscar Ugarteche was so alive, so strong, so brimming with intelligence and energy, that it seems impossible he died this past Saturday 11th of July.

Born in Peru, he died far from his own country, in Mexico City, the place that took him in for his last twenty years and that, became a kind of exile. Óscar always spoke with longing about the Lima of his childhood: the old cafés where his father used to read the newspaper the way people did in Europe, the shops where they would stop afterwards to buy a cake to take home. His face would light up as he described it, and then darken, because none of it, he would say, is left. The savage liberalization policies of the 1980s swept away the cafés, the corner shops, the local economy, even the newspapers, and turned Lima into a chaotic, traffic-choked, underdeveloped city. Óscar spent his whole life studying and fighting those imported neoliberal recipes that manufacture underdevelopment for the many in order to enrich the few.

He came from an affluent family and there was always something faintly aristocratic about him. I mean that in the only sense of the word I like: Óscar was elegant and generous, he gave his time to governments and to small NGOs alike. A good education opened the doors of universities abroad. He studied finance at Fordham University in New York, took a master’s degree at the London Business School (1975), and he began his adult life working as a consultant on finance and sovereign debt. It was the predictable path, the one predetermined by his background. And then, when he was around  thirty, he made a decision I find the most admirable in a life of admirable decisions: he turned around. He could have spent his entire existence oiling the machinery of an unjust system, as the vast majority of people do, but instead he chose to cross over to the other side and devote his intelligence to changing that system and making it better.

That second life, the real one in every way that counts, was longer and harder. In 1982 the foreign debt crisis exploded in Latin America, and there was a lot to be done. He advised governments, the United Nations, the Economic Commission for Latin America (ECLAC), the International Labour Organization (ILO), the United Nations Conference on Trade and Development (UNCTAD), and Oxfam. He was one of the founders of Latindadd, the Latin American network for economic justice, and he worked shoulder to shoulder with civil society organizations, not only across the continent but in other regions too.

From 2005 he was a senior researcher at the Institute for Economic Research of Mexico’s National Autonomous University, the famous UNAM, where he founded the Latin American Economic Observatory (OBELA) and made it, quite literally, a home for a whole generation of young economists, a generation from which, I am certain, new shining stars will rise. In 2021 the UNAM awarded him its National University Prize, the highest honor it confers. He had earned it many times over.

Óscar leaves behind an overwhelming body of work: 28 books, nearly 60 chapters in edited volumes, and more than 90 articles. And yet that whole ocean has a single current. Óscar wrote, again and again, about how the international economic and financial architecture is built to benefit a few. His Historia crítica del FMI (2009), published just after the global financial crisis and his most widely read book, which ran to three editions, tells how the IMF. an institution created to provide stability ended up harming countries and their citizens. His major work, Arquitectura financiera internacional. Una genealogía 1850 a 2008 (2018), travels a century and a half to show that crises are not failures of the system but the system working as designed, and that they always benefit the same people.

His most international book was El falso dilema. América Latina en la economía global (1997), translated into English as The False Dilemma: Globalization, Opportunity or Threat? (2000). Its argument still holds: the choice we are told, either do what neoliberal theory dictates or be shut out of globalization, is a false one, because Latin America and Africa are already shut out of globalization. “Export or die” forgets the only thing development is actually about, which is improving people’s lives, modernizing society without social exclusion. The roots of global economic instability lie not in the South but in a chronic crisis of the productivity of capital in the G7 countries. Latin America and the countries of the South finance the North’s deficits with their reserves at laughable rates, and then borrow back from the North at punishing ones. The main antidote, for Óscar, is a strong, innovative, interventionist state that invests in its people, in infrastructure, in public services, in applied technological research and in a new generation of homegrown manufacturing.

Óscar never read debt and underdevelopment as a problem of bad policies, or of bad governments. He read it as something structural, a mechanism of power, and he proved it book by book, from Teoría y práctica de la deuda externa en el Perú (1980) and El Estado deudor. Economía política de la deuda: Perú y Bolivia 1968 a 1984 (1986) to Modernización reformista y deuda externa en el Perú, 1963-1976 (2019), which closed a circle: forty years on, he returned to the subject of his very first work, this time reading Washington’s declassified archives, from the State Department, the CIA and the National Security Council, linking external debt to the three Peruvian coups of 1962, 1968 and 1975. In Adiós Estado, bienvenido mercado (2004) he recounted what structural adjustment really did to Peruvian society.

But Óscar did not stop at critique, and this is for what he will be missed most. He spent two decades building alternatives. In La gran mutación: El capitalismo real del siglo XXI (2013) he analyzed the problem. In Más allá de Bretton Woods (2012) he brought together leading critical economists to propose the replacement of the exhausted financial institutions of 1944 with new ones. The volume is the result of a congress Óscar convened at the UNAM’s Institute for Economic Research in October 2008, with the worst financial crisis since 1929 already spreading like wildfire from one country to the next. Óscar gathered critical first rank economists and development specialists to explore alternatives, from José Antonio Ocampo, Jomo K.S. and Yoko Kitazawa to Pedro Páez, Alicia Puyana, Kunibert Raffer and Paul Dembinski. There I presented a proposal for building a new generation of development banks, and there too I met Óscar’s partner, Fidel Aroche, on the panel about the problem of privatizing global public goods.

The alternative, for Óscar, was a new regional financial architecture for South America, designed so that the region could stop depending on Washington, and resting on three mutually supporting pieces. First, a monetary union of the South, a flexible basket of the region’s currencies modelled on the one that came before the euro (the ECU), so that neighbors could trade and issue their bonds among themselves without passing through the dollar. Second, the Fund of the South, a regional stabilization fund, a common pool of reserves to draw on the moment a country would need them, so that none would ever again have to go to the IMF on its knees. And third, a new-generation development bank, the Bank of the South. With Alberto Acosta he also published a global proposal for an International Arbitration Tribunal on Sovereign Debt (2003), so that a country drowning in debt would be judged fairly instead of left at its creditors’ mercy. He gathered all these ideas in one of his last books, Elementos para la cooperación financiera regional (2021).

Of those three elements, it was   the Bank of the South  that bound me to Óscar. Beyond friendship, it was a project we both threw ourselves into with real passion. We advised the member countries, we held a workshop with the National Technical Commissions in Ecuador, we wrote about it together, and we did so convinced that we were looking at something that could change the very pattern of development. Latin America was lending its reserves to the North for next to nothing and then borrowing from the North at sky-high rates; the Bank of the South broke that circle and put the region’s savings to work within the region. The idea was not to create yet another multilateral bank, of the kind that lends with conditionalities based on the old neoliberal recipes, but a new one that would truly invest in what people need, from public services to agriculture, infrastructure and national industry, whilst also funding local initiatives, from rural dairy and food cooperatives to public transport, health and care. For the first time, a multilateral bank would be built on the principle of equitable and sustainable development, and governed on a “one country, one vote” basis, with no country lording it over the rest. Seven South American presidents signed its founding act in 2007; the Bank was constituted in 2009 and then slowly faded as we watched with sorrow. It faded because Brazil wanted to be the dominant power, “the North of the South,” we would joke, ruefully. Óscar never gave it up for dead; he treated it as an idea waiting for its moment. And, as always he was right: today we are once again talking about dedollarization, payments in local currencies, and regional development banks.

And there was another part of Óscar that mattered enormously to him. In 1982, in a Peru and an era when it cost you dearly, he was one of the founders of the Homosexual Movement of Lima, the first organization in the country to defend gay rights. And he fought, in person and out in the open, one of the longest and most public battles for marriage equality in Peru: for more than a decade he petitioned the Peruvian courts to recognize his marriage to the economist Fidel Aroche, celebrated in Mexico in 2010. The state refused him once, and again, and again. In May 2018 Óscar took the case to the Constitutional Court, Peru’s highest instance, but his claim was rejected by a majority, four votes to three; and Óscar, without throwing in the towel, announced that he would take it to the Inter-American Court of Human Rights. He waged that fight, knowing what it would cost, and he never abandoned it. He was the same person in both struggles, the economist and the man in love: someone who simply refused to accept that injustice could be passed off as the natural order.

But when I close my eyes and think of Óscar, I think of none of this. I think of the man, the friend. Óscar was a person of enormous vitality, full of humanity, who loved literature and art and conversation, who even wrote a novel, who had a contagious sense of humour and not an ounce of solemnity. He spoke as an equal to a minister and to a student alike, he spoke plainly, and above all he spoke to your heart. You came away from him better than you arrived, full of vitality and hope. That is why so many people loved him.

I still can’t believe Óscar is dead, and that is because he isn’t. Óscar lives on in so many things. He is the Latin American Economic Observatory he founded at the UNAM, and he is Latindadd, and he is every one of the young economists who learned from him to look the system straight in the eye. He is in his books, in the Bank of the South when it finally comes to be, in an equality law that Peru still owes him and that will one day arrive, and when it does, it will be his too. Óscar is in all of that, and in the hearts of the many who loved him and thank him for his vital friendship, his irreverent humour, and his luminous mind.

Isabel Ortiz

Former Director at the International Labour Organization (ILO) and UNICEF, former senior official of the UN and the Asian Development Bank.