Critical Political Economy and the Role of Finance in the Politics of Global Climate Change

HOW CAN WE USE CRITICAL POLITICAL ECONOMY TO EXPLAIN THE ROLE OF FINANCE IN THE POLITICS OF GLOBAL CLIMATE CHANGE?
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Table of Contents 1.    Introduction. 3 2.    Why Focus on Critical Political Economy and Governance in Climate Action?. 4 3.    Motivation. 5 4.    Research Questions. 6 5.    Theoretical Perspective. 6 6.    Impact and Limitation of UK’s Green Finance Policy on Climate Finance and Climate Change  7 6.1.     Impact of the Policy on Climate Finance. 8 6.2.     Impact of the Policy on  Climate Change. 9 6.3.     Limitations of the Policy. 10 7.    Impact of UK’s Green Credit and Green Bonds on Climate Change. 10 7.1.     Impact of UK’s Green Bond on Climate Change. 11 7.2.     Limitations of UK Green Bonds. 12 8.    Summary. 12 9.    References. 14
1 Introduction
Climate change has shifted from an abstract concept to a real emergency that calls for urgent action from global actors. It remains one of the most challenging political issues in the 21st century. One of the explanations for why climate change is a challenging political issue is that political actors lack the political will to take climate action because of varying political and economic interests (Worker & Palmer 2020, p.2). For instance, those in denial of climate change worry that climate change threatens their interests and, as a result, are quick to discredit any scientific evidence supporting the reality of climate change (Dryzek et al. 2011, p.156). It is imperative to analyse the role of finance in the politics of global climate change to ensure that climate change does not continue to present unprecedented challenges. What is increasingly becoming clear is that mitigating global climate change requires huge investment in climate action. According to Bracking and Leffel (2021), to effectively address global climate change, an investment of $95 trillion will be required by 2030. This investment will take the form of infrastructure such as telecommunication, energy, water, and transportation. The question this raises is, who is responsible for raising the finances required for such an investment? In addition, how will this investment be allocated, and who makes these decisions? This paper seeks to examine the critical political economy and climate finance governance to shed light on the role of finance in the politics of global climate change using the United Kingdom’s (UK) green finance policy, green credits, and green bonds as the case study.
2 Why Focus on Critical Political Economy and Governance in Climate Action?
The critical political economy (CPE) and finance governance play an instrumental role in the politics of climate change. According to Worker and Palmer (2020, p.3), CPE and finance governance are fundamental determinants of sustainability and climate change mitigation because they regulate the articulation of sustainability and climate change g...