most likely to be ‘captured’ by the financial lobby. Understanding what forms of
alliance would have the most influence, and analysing how they could be mobilized
and maintained, seems a precondition for achieving substantive reform, and an
important area of future research.
Reforming finance to achieve ‘dark-green’ transformations implies the need for
a different form of alliance. As such transformations tend to be antithetical to
economic growth, they are incompatible with the financial systems we have,
particularly with respect to debt. They would also require a broader transformation
of capitalism, however, and so be likely to be opposed by much of the ‘real
economy’ as well as the financial sector and mainstream politicians. Alliances would
thus need to be built from the grassroots up. Given the global nature of the
‘opposition’, such alliances would also need to be international in scope. This is
an inherently long game, which does not mean that it is not worth playing, of
course.
Understanding how financial systems can influence environmental and social
change in different countries may be a necessary precondition for achieving ‘green
transformation’. This is not sufficient, however. Actually achieving change requires
a nuanced understanding of the political economy of finance. While this chapter
has sketched some of the issues, addressing these two questions – particularly the
intersection between them – remains a crucial area for future research.
Notes
1 The Stern Review (2006) is perhaps the most representative of this perspective.
2 Available online at: www.unep.org/greeneconomy/. Accessed 24 June 2014.
3 See Spratt (2012) for a discussion of environmental taxes.
4 There is some evidence of relative decoupling (i.e. where the carbon intensity of output
falls) at the global level, but none at all of absolute decoupling. To put this into perspective,
the global carbon intensity of growth in 2007 was 760 grams of CO 2 per US$. To be
compatible with a 2-degree threshold, this would have to fall to 36 grams by 2050, a
21-fold reduction, which equates to a 7 per cent reduction every year. Between 1990
and 2007, the average annual reduction was 0.7 per cent (Jackson, 2009).
5 Available online at: www.degrowth.org/. Accessed 24 June 2014.
6 For details on the ‘contraction and convergence’ framework, see: www.gci.org.uk/
index.html. Accessed 24 June 2014.
7 These could be thought of as a ‘weak sustainability’ position that takes a relatively sanguine
view of the substitutability of natural capital (Neumeyer, 2010).
8 When the bank mentions ‘inclusive green growth’, for example, this is conceived of as
something that poor people benefit from in an absolute rather than relative sense. As a
result, there is no need for inequalities to fall for green growth to be ‘inclusive’. For a
discussion, see Spratt et al. (2013).
9 Available online at: www.neweconomics.org/. Accessed 24 June 2014.
10 Available online at: www.degrowth.org/. Accessed 24 June 2014.
11 I have not included foreign exchange in this set, as it is not a financial asset per se, but
a denomination or unit of account.
12 In the 1990s, 97 per cent of the average portfolio of large growth funds in the US turned
over each year. By the 2000s, this had risen to 162 per cent. See: www.morningstar.com/.
Accessed 24 June 2014.
168 Stephen Spratt
alliance would have the most influence, and analysing how they could be mobilized
and maintained, seems a precondition for achieving substantive reform, and an
important area of future research.
Reforming finance to achieve ‘dark-green’ transformations implies the need for
a different form of alliance. As such transformations tend to be antithetical to
economic growth, they are incompatible with the financial systems we have,
particularly with respect to debt. They would also require a broader transformation
of capitalism, however, and so be likely to be opposed by much of the ‘real
economy’ as well as the financial sector and mainstream politicians. Alliances would
thus need to be built from the grassroots up. Given the global nature of the
‘opposition’, such alliances would also need to be international in scope. This is
an inherently long game, which does not mean that it is not worth playing, of
course.
Understanding how financial systems can influence environmental and social
change in different countries may be a necessary precondition for achieving ‘green
transformation’. This is not sufficient, however. Actually achieving change requires
a nuanced understanding of the political economy of finance. While this chapter
has sketched some of the issues, addressing these two questions – particularly the
intersection between them – remains a crucial area for future research.
Notes
1 The Stern Review (2006) is perhaps the most representative of this perspective.
2 Available online at: www.unep.org/greeneconomy/. Accessed 24 June 2014.
3 See Spratt (2012) for a discussion of environmental taxes.
4 There is some evidence of relative decoupling (i.e. where the carbon intensity of output
falls) at the global level, but none at all of absolute decoupling. To put this into perspective,
the global carbon intensity of growth in 2007 was 760 grams of CO 2 per US$. To be
compatible with a 2-degree threshold, this would have to fall to 36 grams by 2050, a
21-fold reduction, which equates to a 7 per cent reduction every year. Between 1990
and 2007, the average annual reduction was 0.7 per cent (Jackson, 2009).
5 Available online at: www.degrowth.org/. Accessed 24 June 2014.
6 For details on the ‘contraction and convergence’ framework, see: www.gci.org.uk/
index.html. Accessed 24 June 2014.
7 These could be thought of as a ‘weak sustainability’ position that takes a relatively sanguine
view of the substitutability of natural capital (Neumeyer, 2010).
8 When the bank mentions ‘inclusive green growth’, for example, this is conceived of as
something that poor people benefit from in an absolute rather than relative sense. As a
result, there is no need for inequalities to fall for green growth to be ‘inclusive’. For a
discussion, see Spratt et al. (2013).
9 Available online at: www.neweconomics.org/. Accessed 24 June 2014.
10 Available online at: www.degrowth.org/. Accessed 24 June 2014.
11 I have not included foreign exchange in this set, as it is not a financial asset per se, but
a denomination or unit of account.
12 In the 1990s, 97 per cent of the average portfolio of large growth funds in the US turned
over each year. By the 2000s, this had risen to 162 per cent. See: www.morningstar.com/.
Accessed 24 June 2014.
168 Stephen Spratt