This presentation was delivered by Joan Stott of the Institute for Economic Justice (IEJ) to the International Climate Politics Hub (ICPH) on 29 July 2026. It draws on a paper prepared for REDCAJU examining de-risking and South Africa’s just transition, and critically assesses the role of private and blended finance in international climate finance.
The global climate finance landscape
The presentation examines international climate finance commitments under the UNFCCC and Paris Agreement, including evolving targets for mobilising climate finance for developing countries. It questions whether the current financial architecture can deliver equitable climate action, highlighting persistent inequalities in the Bretton Woods system, debt burdens, conditionalities, and reduced policy autonomy for developing countries.
Problems with private and blended finance
The presentation argues that private finance and blended finance can shift decision-making away from public institutions towards private investors, credit rating agencies, and other unaccountable regulatory bodies. Market-based approaches may prioritise financial returns over social and environmental outcomes, reinforcing extractive economic structures and producing more expensive and less transformative climate transitions.
The risks of de-risking
De-risking is examined as a mechanism through which governments use guarantees, subsidies, and regulatory concessions to attract private capital. While presented as a way to mobilise investment during periods of fiscal constraint, the approach can transfer financial risks from private investors to governments, communities, and future generations. It may also increase public debt and the cost of socially necessary infrastructure and services.
Reforming public and financial institutions
The presentation calls for stronger regulation of private finance, improved sovereign debt restructuring mechanisms, and reforms to multilateral development banks (MDBs) and development finance institutions (DFIs). It advocates climate-aligned monetary and financial regulation, green taxonomies, climate stress testing, differentiated capital requirements, stronger governance, and explicit climate finance mandates.
Safeguarding public interest
The presentation proposes safeguards for public-private partnerships and blended finance, including transparent cost assessments, parliamentary oversight of guarantees, local investment requirements, and clear accountability and recourse mechanisms. It argues that private finance must be understood within the wider financial system and regulated to protect economic sovereignty and climate justice.
Conclusion
The presentation concludes that private and blended finance cannot substitute for strong public climate finance. A just transition requires public policy leadership, stronger financial regulation, institutional reform, and mechanisms that prioritise social and climate outcomes over private profit.