Green macrofinancial regimes

Examines alternative macrofinancial paths to decarbonization.
Authors

Benjamin Braun

Daniela Gabor

Abstract

Debates about climate policy typically neglect the question of macrofinancial pathways to decarbonisation. This is problematic, because not all pathways are politically and economically viable, nor mutually compatible. We propose a theory of macro-financial regimes, understood as institutional modes of creation and access to financial assets, including money. We map three alternative green macro-financial regimes – Carbon Shock Therapy, small green (derisking) state and big green state – across mechanisms of coordination, industrial policy, the monetary-fiscal mix, financial regulation, and political coalitions. We discuss the associated power configurations and distributional conflicts against the path dependencies of the financial capitalism derisking status-quo.