TY - JOUR
T1 - Producing the ecological economy
T2 - A study in developing fiduciary principles supporting the application of flow-fund consistent investment criteria for sovereign wealth funds
AU - Farrell, Katharine N.
AU - Löw Beer, D.
N1 - Funding Information:
We are indebted to three anonymous reviewers for their thoughtful and constructive comments, which have served to substantially improve the clarity and coherence of our arguments. The first author also wishes to thank Joan Martínez Alier, Malta Faber, Konrad Hagedorn and Pere Ariza Montobbio for encouragement and concrete suggestions regarding how to approach this topic, the faculties and students of the Humboldt-Universität zu Berlin, Agrarökonomie Department, IRI THESys and WINS, where several concepts employed in this text were developed over the course of several years, Alexander Rincón, Sandra Vilardy and Carlos Villamil for sharing their insights and expertise regarding mangrove deterioration in northern Colombia and the Universidad del Magdalena, for hosting her six month research stay in 2017. Research related to the content concerning mangroves was funded, in part, by a grant from the EULALinks Erasmus Mundus programme, making possible that research stay with the Universidad del Magdalena, during which both content and theory concerning mangrove recuperation and conservation was developed. For feedback on an earlier version of this text the authors also thank the members of the IASS team Politicizing the Future, Klaus Eisenack and his Resource Economics Group at the Humboldt-Universität zu Berlin and the participants of the conference “Finance as a response to the environmental crisis?” held at the University of Hamburg in December 2017. Errors, omissions and inconsistencies remain, of course, our own responsibility.
Publisher Copyright:
© 2019 Elsevier B.V.
Copyright:
Copyright 2019 Elsevier B.V., All rights reserved.
PY - 2019/11
Y1 - 2019/11
N2 - In the current financial climate, there is an opportunity for surplus capital to incentivize ecological economic production. Markets and financial products created in response to this surplus include investments in the maintenance of biologically viable natural systems and the development of sustainability transformation technologies. In this paper we critically examine their potential for supporting conservation and socio-ecological transformation. Using Nicholas Georgescu-Roegen's flow-fund theory, we take sovereign wealth fund (SWF) investments as a case in point and ask: according to what principles might it be possible to ensure that SWF investments are directed toward producing new economic processes compatible with the transformation to an ecological economy? Employing the flow-fund theory concepts of economic Anschauung and process-funds, we specify a flow-fund fiduciary responsibility associated with ensuring that an economic process is designed so that its final cause, or purpose, can be realized sustainably and sustained over time. We illustrate the generalizability of these fiduciary criteria by applying them to the two very different potential target investments: mangrove forest recuperation and conservation and the roll-out of the electric vehicle transport sector. We conclude with reflections on the general applicability of this approach and recommendations for further research.
AB - In the current financial climate, there is an opportunity for surplus capital to incentivize ecological economic production. Markets and financial products created in response to this surplus include investments in the maintenance of biologically viable natural systems and the development of sustainability transformation technologies. In this paper we critically examine their potential for supporting conservation and socio-ecological transformation. Using Nicholas Georgescu-Roegen's flow-fund theory, we take sovereign wealth fund (SWF) investments as a case in point and ask: according to what principles might it be possible to ensure that SWF investments are directed toward producing new economic processes compatible with the transformation to an ecological economy? Employing the flow-fund theory concepts of economic Anschauung and process-funds, we specify a flow-fund fiduciary responsibility associated with ensuring that an economic process is designed so that its final cause, or purpose, can be realized sustainably and sustained over time. We illustrate the generalizability of these fiduciary criteria by applying them to the two very different potential target investments: mangrove forest recuperation and conservation and the roll-out of the electric vehicle transport sector. We conclude with reflections on the general applicability of this approach and recommendations for further research.
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U2 - 10.1016/j.ecolecon.2019.106391
DO - 10.1016/j.ecolecon.2019.106391
M3 - Research Article
AN - SCOPUS:85069627918
SN - 0921-8009
VL - 165
JO - Ecological Economics
JF - Ecological Economics
M1 - 106391
ER -
