Global Financial Crisis and Climate Change: A Playbook for Action

Before the world experienced the unfolding COVID-19 pandemic and its accompanying impact on the global economy, the Stanley Center for Peace and Security, E3G, and experts from the climate and finance communities were considering the ways recovery efforts from a global financial crisis could incorporate the kinds of systemic changes needed to deliver a climate-safe world. Also envisioned through diverse dialogues were the ways Paris Agreement-aligned reforms could catalyze economic recovery from such a crisis.

At its 60th Strategy for Peace Conference in October 2019, the Stanley Center convened the roundtable “The Next Global Financial Crisis and Climate Change: A Policy Agenda to Align with the Paris Agreement.” Roundtable participants examined the complex relationship between the financial system and the threat of climate change to identify which aspects of the regulatory and economic framework must change to deliver ambitious climate action. To this end, the group began to prioritize a draft reform package for coherent, transformational, and deliverable changes to the global financial system.

For shorthand, the collection of measures is referred to as “the playbook,” and it is intended as a guide to which decision-makers could turn in a moment of crisis. The recommendations of the playbook are organized into three sections that address the objectives of the Paris Agreement while seeking to build a just global financial system to:

1. Change the rules and norms for a fair, just, and 1.5°C-aligned global economy.
2. Guide a financial stimulus to expand and build the green economy.
3. Implement a structural end to the use of fossil fuels.

After an overview of the playbook and the measures in it, this report offers reflections and recommendations for urgent follow-up actions.

UPDATE: This playbook inspired a subsequent series of Analysis and New Insights that develop bold ideas and practical solutions for faster climate action and a fairer economy out of the COVID-19 crisis. The Stanley Center and E3G have collaborated on these applications of the playbook, which now include:

• A Green Recovery in the COVID-19 Context by Claire Healy
• The Four Ds of Oil’s Just Transition by Victor Menotti
• Now Is the Time: Early Fossil Fuel Displacement in South and Southeast Asia by Sara Jane Ahmed