A green economy is one that will drive investment and financial flows towards restoring our environment and generating a better quality of life for all. Our coalition members share some practical suggestions on reforming our financial systems below.
Reforming Electronic Markets, Trading and the Anglo-Saxon Model
Computer-driven financial markets on unregulated electronic exchanges programmed by algorithms now dominate Wall Street, along with high-frequency trading (HFT). The infamous “Flash Crash” in May 2010, driven by electronic trading, caused stocks in many 401Ks to suddenly fall to pennies and recover in split seconds. Small investors lost confidence, pulling some $70 billion out of stock markets.... Continue reading
Views from the economic frontier
Aniol Esteban: NEF and the GEC share similar visions. A healthy economy is one that brings social justice and wellbeing, within the ecologic limits of the planet. Our current economy prevents us from getting there. So unless we change the economic system we won’t get there. This is not about making minor corrections or tinkering. This is about a fundamental change.
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Green or Greenspan
When forced to explain why so few anticipated the global financial crisis, former US Federal Reserve Chairman Alan Greenspan blamed in his Foreign Affairs article “Never Saw it Coming“, animal spirits, investors’ herding behavior, unimaginably large tail risks, and black swan events.... Continue reading
The Dawn of an Age of Green Bonds?
While the terms green and climate bonds are generally used interchangeably, they refer to bonds whose use of proceeds is tied to climate change related investments, or, in some cases, wider environmental projects. They can be general corporate bonds where the finance is earmarked for climate projects but backed by the issuer’s balance sheet, or asset-backed where the bond payments are linked directly to the performance of the asset.... Continue reading
Will the capital markets finance the green economy?
Consider some numbers for a minute.
Work by the Carbon Tracker Initiative estimates that last year listed fossil fuel companies spent £427bn on developing new reserves of oil, coal and gas – despite the fact we can’t burn all existing reserves to stand a good chance of limiting global warming to 2C, the internationally agreed goal. In the words of Carbon Tracker founder Mark Capanale, this means that “over the next 10 years these companies will be tapping pensioners in the UK and the US for around $7 trillion to expand the fossil fuel sector”.... Continue reading
Assessing the real risk of sovereign bonds
Humanity’s growing consumption of natural resources and ecological services is testing our planetary boundaries. Total human consumption of renewable natural resources and services is already one and a half times greater than the capacity of the biosphere to supply them. In other words, it takes the planet 18 months to generate the food, fibre, timber products, and carbon sequestration services that are consumed in one year.... Continue reading
4 policies for a greener financial system
The shift to a green economy is not just about redirecting investment. It is also about changing our financial system architecture so that it builds, rather than undermines, a greener and fairer economy.
Our financial markets are currently guided by short-term goals and an overreliance on financial derivatives. This sends the wrong signals to investors and the real economy. The reform financial markets, which is already underway, needs to go beyond financial stability alone to address how the markets can build greener, fairer economies. The question is how?... Continue reading
How to 'green' our financial system
Independent efforts by national governments to finance sustainability are important, but because the biosphere is global, environmental policy must be coordinated globally. Since the world does not have a global government capable of establishing hard law, the UNFCCC climate negotiations have so far led the development of a global framework for financing climate policy. However, there is a separate policy system that has long been capable of making decisions influencing massive financial flows worldwide: the financial sector itself.... Continue reading
Corporation 2020? A review
Indian economist Pavan Sukhdev in Corporation 2020 has brought to bear the many facets of his career as a banker with Deutsche Bank, an advisor to the United Nations with his Towards a Green Economy Report and The Economics of Ecosystems and Biodiversity and his studies for the Indian government on India's human and social c... Continue reading
A game of global roulette
The recession imposed by the financial debacle of 2007-2009 still plagues the world. The deeper reason lies in the murky secrets of money-creation and how financial sleight-of-hand enabled financial players to control politicians - even in democracies. Averting further social, financial and environmental crises and the miseries they cause to millions of citizens, taxpayers and small enterprises on Main Street, now urgently requires unmasking the mysteries of money.... Continue reading