As part of my PhD in Global Political Economy at the University of Bristol, I undertook an MRes in Global Political Economy (2021-22), which explored the role of finance in the climate crisis.
The environmental crisis is rapidly gathering pace. Yet all too often proposed and implemented solutions only pursue minor adjustments to the system – capitalism – that has brought the world to this point, rather than its meaningful transformation. In particular, the role of finance and the nature of the financial systems that have been central to the historical development of capitalist hegemony go largely unquestioned.
Although capitalism is hegemonic, it manifests, alongside its financial systems, differently across socio-institutional geographies, shaping development pathways while reflecting competing class and power interests that seek to shape the state and attendant institutional frameworks to their ends. Depending on the constellation of these dynamics, financial systems have varying impacts on society, economy, and the natural world. In this context, this study seeks to understand how different types of financial system, reflecting varieties of capitalism, are contributing towards climate crisis. To understand this impact, this study focuses on patterns of investment and capital flows – the key mechanism by which finance interacts with other realms – into specific sub-sectors that harm or help human impact on the environment; in this instance, fossil fuel energy, currently the biggest net emitter of greenhouse gases, and renewable energy, critical to achieving net-zero commitments globally. This study compares groups of countries of different forms of capitalism and financial system by their relative investment flows into fossil fuel and renewable energy to indicate their relative impact in contributing to the climate crisis.
Future research will look to expand this beyond descriptive data analysis and trends; building datasets and running quantitative regression analyses that examine patterns of causation across a large sample of countries from around the world, seeking to better capture the varieties – across industrialised, emerging and developing economies – of global capitalism and financial system and their impact on the climate crisis.