Podcast Summary: LSE Public Lectures and Events

Episode: Unlocking climate action opportunities: progress amid geopolitical turbulence
Date: October 27, 2025
Host: London School of Economics and Political Science (LSE)
Panelists:

• Lord Nicholas Stern (Chair, LSE Grantham Research Institute)
• Luis Oazu Pereira da Silva (Visiting Professor, CTEx; former Deputy GM, BIS)
• Chris Skidmore (CTEx Chair, Former UK Energy Minister)
• Sharon Yang (Visiting Senior Fellow, CTEx; Head, Coalition of Finance Ministers for Climate Action)
• Mathilde Mesnard (Deputy Director, OECD Environment Directorate)
  Moderator: Rob Patilano (Executive Director, CTEx)

Episode Theme:

Unlocking Climate Action Opportunities Amid Geopolitical Turbulence
This episode brings together top policymakers, academics, and finance experts to examine how climate action can progress in a world increasingly dominated by geopolitical strife. The panel explores the obstacles facing multilateral climate policy, the evolving role of finance ministries and international institutions, lessons from climate economics, and practical pathways for scaling investment—especially in emerging economies.

Key Topics & Insights

I. Introduction: Setting the Stage (00:16–09:36)

Host: Rob Patilano

• Highlights the shift in international priorities from climate urgency toward geopolitical concerns—wars, energy security, debt, AI, and so on.
• Identifies key challenges: diminished climate ambition, fiscal constraints, regulatory hurdles, and an underinvestment in climate transition.
• Notes some positive trends: certain central banks, finance ministries, and coalitions are innovating, but these remain the exception, not the norm.
• Quote:
  “The achievements of the few need to be significantly scaled up... The vast majority of these institutions need to incorporate the best practices...” (08:25)

II. Keynote: The Macroeconomics of Climate Change

Speaker: Luis Oazu Pereira da Silva
(09:36–23:30)

a. The Interconnected Crises

• The world faces a resurgence of old threats: war, weaponized finance, rising inequality, and revived populism.
• Climate change is compounding inequality and political instability.
• The weakening of multilateral safeguards and the rise of AI, social media echo chambers further fragment global cooperation.

b. The False Dilemma: Debt vs. Austerity

• Risk of deprioritizing green investment due to austerity; public investment is crucial for the climate transition.
• Quote:
  “The greatest danger might not be the financial risk of temporary higher debt, but the systemic risk of failing to use that debt productively for the transition... Like in wartime, the question is no longer, 'Can we afford it?' but 'Can we afford not to do something?'.” (13:28)

c. Rethinking Macroeconomic Policy

• Monetary and fiscal policy must adapt:
  • Central banks should tolerate temporary inflation from “Greenflation” and employ scenario analysis.
  • Fiscal policy must recognize the growth impact of climate investment, not just focus on short-term debt ratios.
  • Progressive taxation and local fiscal participation increase legitimacy and sustainability.
  • Financial regulation must reflect climate risk with better disclosure, credible carbon pricing, and green taxonomies.

d. Global Coordination: Bretton Woods 2.0

• Calls for a new international climate finance order:
  • Scaled-up guarantees and official development assistance.
  • New global taxes/levies, and a proposed World Climate Agency.
  • “Plurilateral coalitions of the willing” as pragmatic steps amid geopolitical deadlock.

e. Underlying Message

• The problem is fundamentally political: willpower, not resources, is the missing ingredient.
• Quote:
  “Inaction is a choice, not a constraint. It reflects the dominance of short-term interests...” (21:23)
  “In the end, everything turns out well. And if it hasn’t yet, it’s because it’s not the end.” (22:48)

III. Panel Discussion: Identifying the Key Challenges

A. The Fragility of Multilateralism and International Institutions

Speaker: Mathilde Mesnard, OECD
(25:37–29:59)

• Progress made on "mainstreaming" climate across all OECD policy domains, now rapidly reversing due to rising political resistance.
• Multilateral consensus is breaking down; reports are being blocked.
• The message: stay the course on evidence and data, but shift toward a positive narrative—climate action as economic opportunity.
• Quote:
  “It took us 10 years to get to where we were one year ago. And in a few months it kind of collapsed...” (26:21)

B. Finance Ministries' Role and Adaptation in the New Era

Speaker: Sharon Yang, Coalition of Finance Ministers
(31:34–38:17)

• Finance ministries can't silo climate from their core mandates anymore; it's essential to macroeconomic stability.
• Emphasis on actionable coalitions (“coalition of the willing”): don't let perfect block the good.
• Adaptation and risk management (e.g., disaster bonds, insurance, “debt-for-adaptation” swaps) are vital.
• EMDEs face huge shortfalls (need $2–3 trillion/year); only a small fraction of current climate finance flows to these regions.

C. The Political Challenge: From Center-Right to Political Backlash

Speaker: Chris Skidmore
(40:01–45:04)

• UK’s political climate for net zero shifted dramatically; bipartisan support is now replaced by skepticism and opposition.
• Communications and messaging must change—focus on jobs, growth, and the practical, granular benefits of transition.
• Adaptation is not failure but agility.
• Quote:
  “The paradox is... the more convincing the economic case becomes, actually the harder it is to make that case and have the sort of cut through.” (41:09)

D. Scaling Finance for Emerging Economies

Speaker: Luis Pereira da Silva
(46:04–53:07)

• Mobilization of global savings is hindered by rigid risk assessments, Basel III rules, and rating agency biases.
• Solutions: recalibrate prudential rules to account for multilateral guarantees, develop global taxonomies, and facilitate blended finance.
• EMDEs must improve regulatory environments, but the Global North must also adjust regulatory and disclosure frameworks to encourage investment flows.

IV. Panel Discussion: Practical Solutions and Opportunities

A. International Institutions: Three-Part Action Plan

Speaker: Mathilde Mesnard
(53:48–56:59)

1. MDB Reform: Make Multilateral Development Banks bigger, better, bolder.
2. EMDE “Homework”: Improve enabling environments—deep, green financial systems, better data, standard-setting.
3. Global North’s Homework: Adjust financial regulations, disclosure standards, and investment treaties to favor low-carbon, high-impact finance.

B. Finance Ministries’ Priorities

Speaker: Sharon Yang
(57:07–60:14)

• Address debt sustainability and scale up private finance; use innovative tools (debt-for-climate swaps, better accounting for adaptation payoffs).
• Focus on practical implementation: blended finance, de-risking private capital, especially for countries with limited domestic capital markets.

C. Governments, Business, and Finance: Creating Credible Pathways

Speaker: Chris Skidmore
(60:45–63:44)

• Emphasizes need for a clear, process-driven approach: coordinated “playbooks” for transition, involving government, industry, and finance.
• Delivery and implementation matter more than high-level declarations.

D. Mobilizing Capital: The Technicalities

Speaker: Luis Oazu Pereira da Silva
(64:17–68:19)

• Need to mobilize ~$1.3 trillion for EMDEs by 2035 (currently ~$200bn).
• Revise capital requirements, incentivize insurance/pension funds to invest long-term, use green bonds—but risk ratings must better reflect reality.
• AI and fintech can help with information, risk management, and foreign exchange issues.

V. Audience Q&A Highlights (69:53–88:35)

1. The Role of Technology and Innovation (70:10)

• Panel: Technology is essential; government investment is important, but so is private sector early-stage funding (Chris Skidmore).
• AI is a serendipitous “accelerator” for complex climate system management (Lord Stern).
• Need to ensure technology roadmaps are integrated into sector transition plans.

2. Sovereign and Geopolitical Risk in Africa (71:13)

• Mathilde: Risks are often overestimated due to poor/aggregate data; better project-level information is needed.
• Sharon: Tools like guarantees, insurance, “first loss” mechanisms are being used to crowd in finance and neutralize risk.
• Luis: Grouping countries can pool risk, creating more attractive investment-grade assets (special purpose vehicles, green bonds); monetizing natural capital as another solution.

3. Corporate Funding and Political Turbulence (72:25)

• Mathilde: OECD is resilient to funding cuts; nearly half of its budget already comes from voluntary/alternative sources.
• Lord Stern: As some actors (e.g., the US) step back, others step in (e.g., AIIB, EIB, CAF).
• Corporate funding must be managed to avoid compromising institutional integrity.

4. Global Carbon Pricing (83:33)

• Chris Skidmore: Yes, a global minimum carbon price is desirable, but beware “overreach”; need incremental, pragmatic progress (e.g., Emissions Trading Schemes, CBAM).
• It's vital to focus on enabling investment and finance as part of a broader set of actions.

Notable Quotes

• “Without fairness and redistribution, the transition is seen as yet another injustice, not as a shared necessity...” – Luis Pereira da Silva (11:33)
• “The mood has changed, but the facts have not.” – Referenced by Mathilde Mesnard and Lord Stern (29:59, 85:12)
• “Adapting is not a failure. Adapting is recognizing that you’ve got to be agile on your feet.” – Chris Skidmore (44:00)

Timestamps Guide

| Segment | Content | Start Time | |---------|---------|-----------| | Opening & Context | Host, Rob Patilano | 00:16 | | Keynote | Luis Oazu Pereira da Silva | 09:36 | | Panel: Challenges | Stern, Mesnard, Yang, Skidmore, Silva | 23:30–53:07 | | Panel: Solutions | Mesnard, Yang, Skidmore, Silva | 53:48–68:19 | | Audience Q&A | Multiple Panelists | 69:53–88:35 |

Summary of Tone and Language

• Direct, urgent, and pragmatic in diagnosing the severity of the climate and political situation.
• Determinedly optimistic about opportunities for finance, technology, and institutional innovation.
• Honest about political headwinds and the difficulty of scaling consensus, but resolutely focused on action and delivery.

Conclusion

This episode delivers a rich, multifaceted exploration of climate finance and action under severe geopolitical strain. The panel’s policy expertise—rooted in economics, finance, politics, and practical implementation—illuminates both the gravity of the problems and the specificity of the potential solutions. It’s a call to arms for policymakers, financiers, and academics to redouble efforts, innovate, build coalitions, and ensure investment flows to where it is most needed: in building a viable, equitable future. As Lord Stern concludes, optimism is justified only with strong, rational engagement—and the stakes could not be higher.