ACCESS Seminar: Climate finance as politics: Between de-risking and green industrial policy in NSW Renewable Energy Zones

Abstract

Recent economy-wide climate and energy policy mechanisms have triggered substantial academic and political debate about state-finance relations in contemporary capitalism.

Critics of programs such as the US Inflation Reduction Act argue these programs work to privatise the climate and energy transition through the expansion of the ‘de-risking state’. For others, these programs represent a reinvigoration and greening of industrial policy that radically expands the scale and scope of state interventions. In this paper, we make sense of this debate by exploring how the politics of climate change is being expressed and negotiated through the climate finance arrangements that underpin emerging climate economy programs. We argue that political demands from communities and workers, as well as geopolitical interests, are being unevenly incorporated into the financial mechanisms being used by governments to support private sector investment in the climate economy. These mechanisms re-work public and private categories of ownership and governance, in which public objectives are being pursued through the models of private finance: green industrial policy through the de-risking state.

We illustrate this argument by examining New South Wales’ Renewable Energy Zones, the pillar of the state’s net zero ambitions. We explore the financial mechanisms of REZs, including the social, economic and environmental criteria applied in competitive tenders for state-guaranteed ‘put options’ for renewable energy developers. Through this case, we show how contracting is becoming a key site through which contestation in energy transitions is playing out, providing new sites of social leverage and requiring new political strategies. Ultimately, we argue that these emerging economic models for climate policy are state-finance hybrids, which require new frameworks and forms of scholarly and political engagement.

Biographies:
Gareth Bryant is an ARC DECRA Research Fellow and Senior Lecturer in the Discipline of Political Economy at the University of Sydney. Gareth’s research focuses on how public policy and public finance can create more sustainable, equal and democratic economies.

Sophie Webber is an ARC DECRA Research Fellow and Senior Lecturer in the School of Geosciences at the University of Sydney. Sophie’s research focuses on attempts to make climate adaptation and urban resilience ‘economic’ in the Global South.