FINANCING GREEN TRANSFORMATIONS

Abstract

Different green transformations are more compatible with some types of finance than others, but not all forms of finance are equally abundant. Building on these two facts, this chapter examines the relationship between the financial systems and the types of transformation that might emerge. It also examines the different types of green transformation that have been proposed, and describes a complementary ‘typology of finance’. The chapter analyzes the financing needs of different types of green transformation, and provides a comparison with the forms of finance that exist. To better understand why such a configuration of finance exists, there is a review of some of the literature on the economics of regulation and political economy of finance. In the light of this analysis and research, the chapter concludes with some thoughts on how financial systems might be reformed to facilitate a plurality of green transformations.