Finance
Multilateral banks are key to financing the fight against global warming. Here is how they work
As climate change leads to a seemingly endless stream of weather disasters around the world, countries are struggling to adapt to the new reality. Preparing to better withstand hurricanes, floods, heat waves, droughts and wildfires will take hundreds of billions of dollars.
And then there is confronting the root cause of climate change—the burning of fossil fuels like coal, gasoline and oil—by transitioning to clean energies like wind and solar.
That will take trillions of dollars.
Enter climate finance, a general term that means different things to different people but boils down to: paying for projects to adapt to and combat the cause of climate change. Financing related to climate change is especially important for developing countries, which don’t have the same resources or access to credit that rich countries do.
International mega banks, funded by taxpayer dollars, are the biggest, fastest-growing source of climate finance for the developing world. Called multilateral development banks because they get contributions from various countries, there are only a handful of these banks in the world, the World Bank the largest among them.
How these banks allocate resources are some of the weightiest decisions made in defining how poorer nations can respond to climate change. They were a key reason why, in 2022, the world met a goal countries had set in 2009 to supply developing nations with $100 billion annually to address climate change.
At the annual U.N. climate conference that opens Monday in Azerbaijan, global leaders are expected to discuss how to generate trillions of dollars for climate finance in the years to come. The nonprofit research group Climate Policy Initiative estimates the world needs about five times the current annual amount of climate financing to limit warming to 1.5 C (2.7 degrees F) since the late 1800s. Currently, global average temperatures are about 1.3 C (2.3 degrees F) higher.
A new goal needs to reach higher and hold institutions and governments accountable to their promises, said Tim Hirschel-Burns, an expert at Boston University’s Global Development Policy Center.
“The core of it is getting a goal that is going to catalyze the actions that fills the really significant climate finance gap that developing countries face, which is much bigger than $100 billion,” he said.
As the international community has come to accept the reality of climate change, the debate has shifted to the question of where the money to fund the energy transition will come from, said Dharshan Wignarajah, director of Climate Policy Initiative’s London-based office.
“The question is not ‘are we going to transition?’, but ‘how quickly can we engineer the transition?’” said Wignarajah, who helped lead the climate talks, called the Conference of Parties, when the United Kingdom was host in 2021. “That has forced finance to be ever-more prominent at the COP discussions, because ultimately it comes down to who pays.”
FILE – People examine the damage at an area badly affected by a flash flood in Tanah Datar, West Sumatra, Indonesia, May 13, 2024. (AP Photo/Ali Nayaka, File)
Developing countries most dependent on multilateral banks
Developing nations are much more reliant on these banks for financing climate projects than industrialized countries.
In the U.S. and Canada, commercial banks and corporations provided funding for more than half of climate-friendly projects in 2022, according to Climate Policy Initiative. In sub-Saharan Africa, those private lenders only accounted for 7%.
This is because it is harder for developing countries to get low interest rates.
“If you’re Kenya, and you want to borrow from private lenders, they might charge you 10% interest rates because your credit rating isn’t very good,” Hirschel-Burns said.
But the multilateral banks have better credit ratings than many countries do. For example, the International Development Association — an arm of the World Bank and the top international aid provider to Kenya — has the highest possible rating from Moody’s Investor Service, while Kenya itself has a junk rating.
The banks borrow money with that better rating, then lend to developing countries in turn, offering a more reasonable rate than governments could get if they borrowed directly from private lenders.
Some bank projects work against climate goals
The multilateral banks’ development goals are wide-ranging. They seek to improve people’s health and the environment, expand energy access and end poverty. Addressing energy access has meant the banks have provided billions of dollars for fossil fuel power plants, according to an AP analysis, though their policies have improved and fewer such projects have been funded in recent years.
Investment in fossil fuels continues to rise worldwide, reaching $1.1 trillion in 2024, according to the International Energy Agency. And multilateral banks continue to rank among the biggest funders of fossil fuel-prolonging projects, helping to “lock in a high-carbon pathway” for countries, according to a report by the Clean Air Fund, which lobbies for the funding of projects to improve air quality.
“This is development aid we’re talking about, and it should be assisting countries to leapfrog,” said Jane Burston, CEO of the Clean Air Fund, referring to the idea that developing countries could industrialize with renewable energies and skip over development that rich nations historically made with fossil fuels.
“It’s baffling why development assistance is being given to something that continues to make people unhealthy as well as harms the planet,” she added.
FILE – James Tshuma, a farmer in Mangwe district in southwestern Zimbabwe, stands in the middle of his dried up crop field amid a drought, in Zimbabwe, March, 22, 2024. (AP Photo/Tsvangirayi Mukwazhi, File)
Seemingly contradictory actions can be seen in a loan made by an arm of the World Bank, the International Bank for Reconstruction and Development. It loaned $105 million toward rehabilitating coal plants in India, with their last loans toward the project going out in 2018, according to an Associated Press analysis of data from the Organization for Economic Cooperation and Development.
Coal spews carbon pollution, contributing to climate change and creating breathing problems for people who are exposed. However, the improvements made coal plants more efficient and reduced their greenhouse gas emissions, according to project documents.
The Clean Air Fund’s report estimated the World Bank provided $2.7 billion in “fossil fuel prolonging finance” between 2018 and 2022. During that time, the bank also loaned about 32 times the amount for renewables as they did for non-renewables in India, including $120 million for rooftop solar.
“Renewable energy support is always our first choice as we work to provide access to electricity to the nearly 700 million people who still cannot power their homes, schools, hospitals, and businesses,” a World Bank spokesperson said in a statement.
The bank’s policies still “selectively support natural gas as a transition fuel” if its research shows the project is low risk to the climate, the spokesperson said. The bank’s recent policies require rigorous vetting for every project to make sure its investments reduce climate impacts.
The World Bank delivered $42.6 billion in climate finance in its most recent fiscal year, a 10% increase from the year before. And at the most recent COP, the bank promised nearly half of its lending will soon go toward climate finance.
In Vietnam, about half of power generation comes from fossil fuels, primarily coal power. The Asian Development Bank loaned about $900 million on coal in Vietnam, with their spending on the fossil fuel in the country ending in 2017. The bank’s updated climate policies “will not support coal mining, processing, storage, and transportation, nor any new coal-fired power generation,” the bank said in a statement. The bank put $9.8 billion toward climate finance in 2023, and aims to finance $100 billion in climate-friendly projects between 2019 and 2030.
The country’s biggest growth area for energy is in wind. The Global Energy Monitor ranks Vietnam seventh in the world in planned wind power. And the Asian Development Bank committed about $60 million in loans toward wind energy in Vietnam between 2021 and 2022.
FILE – Residents rescue kittens from the roof of a flooded home in Cobija, Bolivia, Feb. 28, 2024. (AP Photo/Juan Karita, File)
The banks have made broad commitments in recent years to align with the landmark 2015 Paris Agreement. But those promises leave pathways open to continue funding fossil fuels, said Bronwen Tucker, global public finance co-manager at Oil Change International.
According to the green group’s monitoring of the banks’ commitments, all nine of the major banks tracked can fund gas projects in at least some cases. Rich countries should step in and fill the trillions of dollars in need for climate action with donations to less developed countries “to avoid climate breakdown and save lives,” Tucker said.
“The MDBs can’t be climate bankers if they are still fossil bankers,” she said. “Relying on banks that are locking in fossil fuels and the worst-ever debt crisis is not working.”
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The Associated Press’ climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.
Net Income & Adjusted EBITDA Performance Driven by Further Stabilization and Improvement in Rasmussen and Hondros Segments
CHARLES TOWN, W.Va., Nov. 12, 2024 /PRNewswire/ — American Public Education, Inc. (Nasdaq: APEI), a portfolio of education companies providing online and campus-based postsecondary education and career learning to over 125,000 students through four subsidiary institutions, has reported unaudited financial and operational results for the third quarter ended September 30, 2024.
“The third quarter demonstrated continued progress in the goals we set out at the beginning of this year,” said Angela Selden, President and Chief Executive Officer of APEI. “In the third quarter of 2024, Rasmussen had its first positive year over year enrollment comparison since our acquisition of the business and we expect continued momentum in that business. Hondros continues to show improvement in the third quarter and we expect further enrollment growth in the fourth quarter of this year.”
“We remain on track to deliver on the expectations we set out at the beginning of this year. We maintained that Rasmussen would be EBITDA positive in the second half of 2024 and we are on track to deliver. We are confident in our revenue, net income and Adjusted EBITDA outlook in 2024.
We believe the steps we have taken throughout last year and this year are leading to greater student engagement and outcomes and will continue to be reflected in the financial results and provide greater long term shareholder value,” concluded Selden.
Finance
The Historian’s Notebook: The Nobel Laureate Who Pioneered Modern Behavioral Finance at Yale
The Historian’s Notebook: 50 Years of Business & Society is a blog series created in preparation for the 50th anniversary of Yale SOM in September 2026. The series is written by Yale SOM’s resident historian, Michelle Spinelli. Reach out if you have an idea for a blog post, memories or photos to share, or an inquiry about SOM history.
One Thursday in January 2014, Yale SOM students, faculty, and staff packed Zhang Auditorium in the newly opened Edward P. Evans Hall to listen to Robert Shiller, now the Sterling Professor Emeritus of Economics, reprise his 2013 Nobel Prize lecture, “Speculative Asset Prices.” Nicholas Barberis, the Stephen and Camille Schramm Professor of Finance at SOM, introduced Shiller as being responsible for “some of the most innovative work of any economist in his generation.”
Just a few weeks prior, Shiller had accepted the Nobel Prize in Economic Sciences along with Eugene F. Fama and Lars Peter Hansen for research that showed that while the price of stocks and other assets cannot be predicted accurately in the very short term, more accurate predictions can be made over a period of years.
Shiller’s research, widely viewed as the starting point for modern behavioral finance, examined stock prices over the previous century and concluded that they were too volatile to be explained only by investors rationally forecasting future dividends. Instead, Shiller argued, irrational thinking, like bias and emotion, played a role. Shiller challenged the efficient market hypothesis, which holds that securities prices properly reflect all available information. The argument “got me in a lot of trouble,” Shiller later remarked, because many thought it oversimplified the place of dividends in the stock market.
Shiller’s work has helped to explain market volatility and the speculative bubbles that can be fueled by mass misinformation and herd instinct. He predicted the collapse of both the dot-com bubble and the U.S. subprime housing bubble. Shiller has also written syndicated articles and books for popular audiences, including Irrational Exuberance, an analysis and explication of speculative bubbles that focuses on real estate and the stock market, and Animal Spirits, an exploration of the government’s role in restoring confidence in the economy, which he co-authored with fellow Nobel laureate George Akerlof.
The audience at Zhang Auditorium was particularly eager to hear Shiller’s talk because of his central role in making Yale SOM a leader in behavioral finance research—the field he pioneered while at Yale. He was instrumental, for example, in facilitating a 2004 grant of $1.6 million from Yale College alum Andrew Redleaf and his company, Whitebox Advisors; the grant enabled the International Center for Finance to engage in more behavioral finance research initiatives, expand outreach, and establish the Yale Summer School in Behavioral Finance, now a widely known program.
Shiller has also attracted faculty with interest in behavioral finance to the school, including Kelly Shue, James Choi, and Barberis, who said he came to SOM in 2004 “to continue the tradition of the work that Shiller began.”
With Shiller’s support and encouragement, Barberis launched the Yale Summer School in Behavioral Finance in 2009. The one-week intensive course of study is offered every two years and educates PhD students from across the globe on path-breaking research. The summer school has now hosted close to 400 students, many of whom have become prominent behavioral finance researchers in their own right.
Shiller retired in 2022, but behavioral finance remains a core area of research and exploration at the school. “Inspired by Bob’s example, SOM faculty and graduate students have been producing remarkable behavioral finance research that has made Yale one of the leading centers, if not the leading center, for innovation in this field,” Barberis says.
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Dosed first patient in Phase 2/3 DRAGON II trial of Tinlarebant for the treatment of Stargardt disease (STGD1)
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Pivotal global Phase 3 PHOENIX trial of Tinlarebant in geographic atrophy (GA) subjects is ongoing with more than 280 subjects enrolled
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Appointed Hendrik P.N. Scholl, MD, MA, a globally recognized leader in the field of ophthalmology and the coordinating principal investigator of the largest natural history study of Stargardt disease, as Chief Medical Officer
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Interim analysis from the pivotal global Phase 3 DRAGON trial of Tinlarebant in adolescent STGD1 subjects anticipated by end of 2024 or early 2025
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Company to host webcast on Tuesday, November 12, 2024, at 4:30 p.m. EST
SAN DIEGO, Nov. 12, 2024 (GLOBE NEWSWIRE) — Belite Bio, Inc (NASDAQ: BLTE) (“Belite” or the “Company”), a clinical-stage biopharmaceutical drug development company focused on advancing novel therapeutics targeting degenerative retinal diseases that have significant unmet medical needs, today announced its financial results for the third quarter ended September 30, 2024, and provided a general business update.
“I am pleased with the continued progress we made across our clinical programs. The pace of enrollment for the PHOENIX trial remains strong, and in the quarter, we completed the Phase 1b DRAGON II trial of Tinlarebant in Stargardt disease in Japan and dosed the first patient in the Phase 2/3 portion of the trial. We are well-positioned to achieve critical milestones and look forward to providing an update on the interim analysis from our pivotal Phase 3 DRAGON trial toward the end of 2024 or early 2025,” said Dr. Tom Lin, Chairman and CEO of Belite. “In the quarter, we were also excited to welcome Dr. Scholl, a leading global expert in Stargardt disease and age-related macular degeneration, as our Chief Medical Officer. Dr. Scholl’s decision to join Belite following his experience as Chair of the Data and Safety Monitoring Board for both our Phase 2 and Phase 3 Stargardt disease trials further validates our belief in Tinlarebant’s immense potential.”
Third Quarter 2024 Business Highlights and Upcoming Milestones:
Clinical Highlights
Tinlarebant (LBS-008) is an oral, potent, once daily retinol binding protein 4 (RBP4) antagonist that decreases RBP4 levels in the blood and reduces vitamin A (retinol) delivery to the eye without disrupting systemic retinol delivery to other tissues. Vitamin A is critical to normal vision but can accumulate as toxic byproducts in individuals affected with STGD1 and GA (the advanced form of dry age-related macular degeneration (dry AMD) leading to retinal cell death and loss of vision.
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