The Tightening Links Between Financial Systems and the Low-Carbon Transition

  • Emanuele Campiglio
  • Antoine Godin
  • Eric Kemp-Benedict
  • Sini Matikainen
Chapter
Part of the International Papers in Political Economy book series (IPPE)

Abstract

This chapter investigates the implications of the policy changes triggered by the Global Financial Crisis on the transition to a low-carbon society. The immediate effects have mostly been negative: national governments have retracted from public spending and fiscal support to clean technologies; new macroprudential regulation has discouraged banks from lending to low-carbon projects; monetary policies have perpetuated the high-carbon lock-in of the economic system. However, the transformed macroeconomic and institutional setting, together with the increased awareness of the links between financial dynamics and natural resources, has also created new space of opportunity for low-carbon investment and financing. New concepts and policy proposals have emerged, including the ‘green growth’ narrative, the idea of aligning macroprudential policy to climate objectives and the suggestion to use unconventional ‘Quantitative Easing’ monetary policies to support low-carbon investment.

Keywords

Low-carbon transition Climate-related risks Environmental policy Macroprudential regulation Quantitative easing Green growth 

JEL Classification

E44 E58 E62 G20 Q43 Q58 

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Copyright information

© The Author(s) 2017

Authors and Affiliations

  • Emanuele Campiglio
    • 1
  • Antoine Godin
    • 2
  • Eric Kemp-Benedict
    • 3
  • Sini Matikainen
    • 4
  1. 1.Vienna University of Economics and BusinessViennaAustria
  2. 2.Kingston UniversityKingston upon ThamesUK
  3. 3.Stockholm Environment InstituteSomervilleUSA
  4. 4.London School of Economics and Political ScienceLondonUK

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