Global economic governance and the fight against climate change

Cullen S. Hendrix ()
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Cullen S. Hendrix: Peterson Institute for International Economics

No WP25-17, Working Paper Series from Peterson Institute for International Economics

Abstract: The institutions of global economic governance--the World Trade Organization, the International Monetary Fund, and the World Bank Group--face unprecedented challenges at a time when global efforts to mitigate and adapt to climate change are faltering. Rising economic nationalism, resurgent great power competition, and climate-skeptic populism in high-income democracies are undermining the ability of these institutions to coordinate around climate solutions. Facing these pressures, regional and plurilateral arrangements will be increasingly important for providing paths forward. This paper explores the concept of "tied aid" as a means of meeting the global South's need for large transfers in a context of increasing economic nationalism. It also highlights the pivotal role of countries other than the United States and China in sustaining and reforming global governance in a multipolar world. Although not first-best solutions, these approaches may be the most politically feasible strategies for advancing global climate mitigation, adaptation, and finance in the near future.

Keywords: Climate Change; Economic Nationalism; Climate Finance; Plurilateralism; Geoeconomics; Energy (search for similar items in EconPapers)
JEL-codes: F51 F53 O19 Q54 (search for similar items in EconPapers)
Date: 2025-07
Note: Version of the chapter originally published in Spanish and written for El Club Español de la Energía's publication "Energy and Geostrategy 2025" [https://www.enerclub.es/libros/eg2025/]. Republished in English with permission.
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