ABSTRACT
This chapter makes the case for a publicly owned green investment bank as part of the financial architecture to cope effectively with the challenge of climate change, particularly to finance technological change and adaptation. The chapter has as its starting point the neglect of adaptation in integrative assessment models (IAM) climate change models. It incorporates heterodox views of development and growth which run counter to dominant IAM views. It then goes on to argue that the focus on adaptation and resilience will require institutional change in terms of developing public sector investment banks which will go where the private sector will not. In reaching that conclusion, it explores the following: an analysis of the economic assumptions underlying IAM models; followed by a discussion of heterodox economic viewpoints on climate change and related development experience; as the economic context for India, a snapshot of the current state of play of the Indian economy and how it faces both stagnation and financial fragility; this is followed by a discussion of the need to take adaptation seriously in climate change policy; all of these are used to make a case for a public-owned green investment bank and lessons from Brazil’s Banco Nacional de Desenvolvimento Econômico e Social (BNDES) on design and structure.
