BiGS Actionable Intelligence: An economist who studies economic reforms and the global economy argues that business needs better data to make decisions about financing projects for the green economy. The role of government, he argues, is to hold the World Bank accountable for providing that data.

In advance of economist Peter Blair Henry’s recent seminar with Harvard Business School’s Institute for the Study of Business in Global Society (BiGS), I had the chance to speak with him about the role of business in solving complex societal problems—specifically, financing the world’s transition to a decarbonized economy.

A estimated $2.4 trillion a year—above what is currently being invested—must be raised to achieve a global climate transition by 2050. There is disagreement, especially in the United States, on the role business should play. But Henry is clear that if businesses are going to play a significant and productive role in financing this transition in emerging and developing economies, they need realistic data on the economic and financial return of doing so. Otherwise, we are likely headed for disappointment and debt crises.

Henry, who studies economic reforms and the global economy, is Dean Emeritus of New York University’s Leonard N. Stern School of Business. Currently, he is a senior fellow two Stanford University centers—the Hoover Institution and Freeman Spogli Institute for International Studies.

Here are excerpts from our conversation, edited for length:


“There’s a huge opportunity in the world – it’s called financing the climate transition. And we need to have a clear conversation about it.

French President Emmanuel Macron held a summit in June where he spoke about how we can generate new kinds of financing solutions. But ‘how’ is the wrong question.

The right question is ‘what’ should we be trying to finance?

That is a conversation that needs to take place between business, government, and multilateral development banks (e.g. World Bank, Inter-American Development Bank, African Development Bank). We need better evidence about where the return for society is going to be. It’s fundamentally a data problem. We’re now in 2023. The multilaterals have a lot of data, but we need them to put the data they have to good use.

For example, look at large countries such as Nigeria, Indonesia and Egypt.

These governments have to identify what they think are the priority infrastructure projects for their societies. Then, the World Bank and its multilateral development bank partners must produce transparent, unsentimental estimates of the prospective returns on these projects that enables private investors to make rational judgments about whether or not they can make money by investing in them. What are the environmentally friendly projects on which investors can make money?

That is the question we need to answer. When we do, then businesses can make clear decisions about which things are profitable for them and which actually require subsidies. We need data so business can make its own decisions.

[When asked for an example of an infrastructure project that could not make money without subsidies, Henry pointed to the case of scaling solar energy in Zambia. For a deeper dive, he recommends this Center for Global Development article or the article from Todd Moss.]

It’s not the role of business to produce this kind of information. It’s the job of the multilateral banks. Yes, the role of business is to be good stakeholders—but ultimately, they do want to do well. If you give them information that lets them choose, it can let them do well and do good. They can make the right decision. Right now, we’re just talking about doing good without the information we need to make it happen.

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