Green macrofinancial regimes

Debates about climate policy have neglected the question of macrofinancial pathways to decarbonisation, not all of which are economically and politically viable. We propose a theory of macrofinancial regimes, understood as combinations of monetary, fiscal, and financial institutions that shape the creation and allocation of credit/money, and hence the speed and nature of the green transition. Focusing on two dimensions—the scale of green public spending and the degree of discipline imposed on private capital—we derive a typology of four regimes. Derisking regimes are low-discipline: under weak derisking, a fiscally constrained state tweaks the risk-return profile on infrastructure assets to reduce the carbon…

• CB
  Copenhagen Business School
• UD
  Université de Genève