The limits of derisking. (Un)conditionality in the European green transformation

Franziska Cooiman*

*Corresponding author

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

Abstract

The ecological transformation of the economy is frequently approached politically with market-based policy, in particular derisking, which attempts to steer private financial actors into ecological and climate sustainability by taking on risks. To understand the effects of such approaches, I point to the relational and concrete dynamics that unfold between states and finance. Conceptually, I propose analyzing the investment chains that surround these programs, and the conditionalities that constitute its relations, which I read as manifestations of infrastructural power. I argue that conditionalities are the qualifier of the transformative potential of market-based policy programs. The proposed “micro-financial” analysis allows to unpack the inherent limitations of derisking-based governance approaches. These approaches come with a dependence on financial intermediaries, which results in weak conditionality and enforcement. Concretely, I analyze how under BlueInvest, a pilot within the European Green Deal (EGD), the European Commission (EC) mandates the European Investment Fund (EIF) to harness venture capital (VC) funds in order to foster the blue economy. I show how, as a consequence of investors’ intermediary position in derisking-based operations and the EIF’s profitability orientation, policymakers come to depend on venture capitalists, hindering strong and effective conditionality and hardwiring limited sustainability effects into the investment chain.
OriginalsprogEngelsk
TidsskriftCompetition and Change
Vol/bindOnlineFirst
Antal sider19
ISSN1024-5294
DOI
StatusUdgivet - 2024

Emneord

  • blue economy
  • conditionality
  • European green deal
  • green finance
  • Infrastructural power
  • venture capital

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