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Financing the Sustainable Development Goals

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  • Thomas Lagoarde-Segot

    (Department of Economics and Finance, KEDGE BS & SDSN France, 33405 Talence, France)

Abstract

This paper contends that carving out pathways to finance the sustainable development goal (SDG) agenda entails to reconsider tacit assumptions regarding the functioning of financial systems. We first use a history of economic thought perspective to demonstrate the flaws of the loanable fund theory, which has come to underlie SDG finance strategies. We then introduce the alternative endogenous money theory using a consistent theoretical and accounting framework. This allows us to identify and discuss a set of financing mechanisms that would permit to bridge the SDG budget gap. These mechanisms include the issuing of sovereign green bonds, the modification of the European Central Bank’s collateral framework, changes in capital adequacy ratios, a market of SDG lending certificates and the introduction of rediscounting policies. We back up the discussion with examples from economic history.

Suggested Citation

  • Thomas Lagoarde-Segot, 2020. "Financing the Sustainable Development Goals," Sustainability, MDPI, vol. 12(7), pages 1-22, April.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:7:p:2775-:d:339942
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    References listed on IDEAS

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    4. Farhad Taghizadeh-Hesary & Naoyuki Yoshino & Han Phoumin, 2021. "Analyzing the Characteristics of Green Bond Markets to Facilitate Green Finance in the Post-COVID-19 World," Sustainability, MDPI, vol. 13(10), pages 1-24, May.
    5. Raffaele Sisto & Javier García López & Alberto Quintanilla & Álvaro de Juanes & Dalia Mendoza & Julio Lumbreras & Carlos Mataix, 2020. "Quantitative Analysis of the Impact of Public Policies on the Sustainable Development Goals through Budget Allocation and Indicators," Sustainability, MDPI, vol. 12(24), pages 1-15, December.
    6. Ewa Dziwok & Johannes Jäger, 2021. "A Classification of Different Approaches to Green Finance and Green Monetary Policy," Sustainability, MDPI, vol. 13(21), pages 1-15, October.
    7. Pieter Bosmans & Frederic de Mariz, 2023. "The Blue Bond Market: A Catalyst for Ocean and Water Financing," JRFM, MDPI, vol. 16(3), pages 1-48, March.
    8. Alessandro Rizzello & Abdellah Kabli, 2020. "Sustainable Financial Partnerships for the SDGs: The Case of Social Impact Bonds," Sustainability, MDPI, vol. 12(13), pages 1-22, July.
    9. Fizah Rajani & Karla A. Boluk, 2022. "A Critical Commentary on the SDGs and the Role of Tourism," Tourism and Hospitality, MDPI, vol. 3(4), pages 1-6, October.
    10. Lagoarde-Segot, Thomas & Martínez, Enrique A., 2021. "Ecological finance theory: New foundations," International Review of Financial Analysis, Elsevier, vol. 75(C).
    11. Joana Costa & Diana Cancela & João Reis, 2021. "Neverland or Tomorrowland? Addressing (In)compatibility among the SDG Pillars in Europe," IJERPH, MDPI, vol. 18(22), pages 1-18, November.
    12. Rahmani, Amir & Mashayekh, Javad & Aboojafari, Roohallah & Bonyadi Naeini, Ali, 2023. "Determinants of households' intention for investment in renewable energy projects," Renewable Energy, Elsevier, vol. 205(C), pages 823-837.

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