Private finance crashed the economy and is too consumed by the profit motive to be a reliable ally against climate change. We should not allow COP24 to be their board meeting, argues Tomaso Ferrando from the University of Bristol
Lehman Brothers filed for bankruptcy on September 15, 2008. The investment bank’s collapse was the drop that made the bucket of global finance overflow, starting a decade of foreclosures, bailouts and austerity.
The resulting tsunami hit the global economy and public sector, discrediting finance and its attempts to extract large rents from every aspect of the economy, including housing and food. An alternative was urgently needed.
Ten years later, private finance and large investors will play a central role at the COP24 in Katowice, Poland, and in the full implementation of the 2015 Paris Agreement.
Representatives from pension funds, insurance funds, asset managers and large banks will attend the meeting and lobby governments, cities and other banks to favour investments in infrastructure, energy production, agriculture and the transition towards a low-carbon economy.
Has finance cleaned up its act?
There is a $2.5tr gap in development aid which needs to be filled if poor countries can adequately mitigate the effects of climate change. With little enthusiasm among rich countries to stump up, the role of private finance is inevitable. Policy makers trust financial capital as our best hope of securing investment to avoid the catastrophic warming beyond 1.5C.
This has been the case for a while – the first announcement came at the UN Climate Summit in 2014, when a