Since the 2015 Paris agreement and adoption of the UN 2030 agenda for sustainable development, there has been a growing political momentum to address the issues of climate change and loss of natural resources.
In this context, two major developments are underway:
– An ambitious European sustainable finance agenda that aims at integrating sustainability concerns into mainstream finance
– The forthcoming creation of new financial markets on environmental degradation, based on the idea that we need to put a price on nature to save it and that market-based solutions would succeed where traditional environmental policies have failed.
While excellent work is being carried out on sustainability in general, these major developments require complementary research from a finance angle.
THIS IS OUR MISSION: Analyse the new market mechanisms and sustainable finance frameworks, in order to determine how likely they are to meet their stated environmental, economic and social objectives.
Our purpose is to highlight the simple policy questions underlying the complex market mechanisms and challenge unfounded claims, to enable a healthy public debate on these issues.
Many key developments will happen over the coming years and the policy choices we make will shape the decades to come.
Despite the perception of being on a solid track, climate policies may be more fragile than we think and may drastically change in the foreseeable future.
While green finance is expanding dramatically, most people have never heard of it, of carbon markets, natural capital, green bonds, environmental services or offset projects and are thus excluded from the debate.