Current trends in the development of a green finance system: methodology and practice
The concept of green growth and sustainable development is turning into a global ideology guiding the transformation of national economies. The focus is shifting from quantitative assessments of performance to rational choice conditions. Rationality is becoming the decisive factor behind sustainable green growth, and a change in the financial model that supports such growth may be needed. Therefore, the most urgent problems relating to sustainable growth are the transformation of the finance system, on the one hand, and the creation of a new financial paradigm based on the principles of responsible investment and corporate social responsibility, on the other. This study aims to consider the theoretical and practical aspects of creating a national green finance model ensuring sustainable growth in the Russian Federation. The development of a green finance mechanism and a green bond market in the Baltic Sea countries is analysed to determine national features and explore the possibility of translating the Baltic experience into practices usable in Russia. The research uses economic observations, economic description, structural and logical analysis, and systems analysis. Perhaps the most significant finding is the description of a methodological framework for sustainable development theory, as seen by major schools of economic thought. Studying the experience of the Baltic Sea countries in creating a new finance model of responsible investment helped detect national features and development priorities that can be used in Russia in devising the ideology, principles, and mechanism of green growth and sustainable growth financing.
1. Brundtland, G. H. 1987, Our common future: Report of the World Commission on Environment and Development, Oxford, New York, Oxford University Press, 383 p.
2. Nordhaus, W. D. 1977, Economic growth and climate: The case of carbon dioxide. The American Economic Review, vol. 67, no. 1, p. 341—346.
3. Anderson, G. M. 1989, The butcher, the baker, and the policy-maker: Adam Smith on public choice, History of Political Economy, vol. 21, no. 4, p. 641—659.
4. Blaug, M. 1986, Great economists before Keynes: an introduction to the lives and works of one hundred great economists of the past, Brighton, Wheatsheaf.
5. Seidl, I., Tisdell, C. A. 1999, Carrying capacity reconsidered: from Malthus’ population theory to cultural carrying capacity, Ecological Economics, vol. 31, no. 3, p. 387—403.
6. Victor, P. A. 2012, Growth, degrowth and climate change: A scenario analysis, Ecological Economics, vol. 84. P. 206—212. doi: 10.1016/j.ecolecon.2011.04.013.
7. Blaug, M. 1994, Pigou’s Welfare Theory, Economic thought in Retrospect = Economic Theory in Retrospect, Moscow, Delo, vol. XVII, p. 551—553.
8. Coase, R. H. 1960, The Problem of Social Cost, Journal of Law and Economics, no. 3, p. 1—44.
9. Buchanan, J., Brennan, G. 1985, The Reason of Rules, Cambridge, Cambridge University Press.
10. Buchanan, J., Tullock, G. 1962, The Calculus of Consent: Logical Foundations of Constitutional Democracy, Ann Arbor, University of Micigan Press, p.VlI.
11. Acemoglu, D., Robinson, J. 2012, Why Nations Fail: The Origins of Power, Prosperity, and Poverty, Crown Publishers, New York, 571 p.
12. Yakovlev, I. A., Kabir, L. S., Nikulina, S. I., Rakov, I. D. 2017, Financing “green” economic growth: concepts, problems, approaches, Finansovyi zhurnal [Financial Journal], vol. 3, no. 37, p. 9—21 (in Russ).
13. Shkiperova, G. T., Kurilo, A. E., Prokopyev, E. A. 2019, Development of the «green» economy: a comparative analysis of the regions of the North-West, Ekonomika i sotsium: sovremennye modeli razvitiya [Economy and society: modern models of development], vol. 9, no. 3, p. 344—364 (in Russ).
14. Semenova, N. N., Eremina, O. I., Skvortsova, M. A. Green financing in Russia: Сurrent status and development prospects, Finansy: teoriya i praktika [Finance: Theory and Practice], vol. 24, no. 2, p. 39—49. doi: 10.26794/2587-5671-2020-24-2-39-49 (in Russ.).
15. Yakovlev, I. A, Kabir, L. S. 2018, Mechanism of financing «green» investments as an element of the national strategy for financing sustainable development, Finansovyi zhurnal [Financial Journal], no. 3, p. 9—20 (in Russ).
16. Yakovlev, I. A., Kabir, L. S., Rakov, I. D. 2017,“Green” investments in Russia: main trends, Ekonomika: teoriya i praktika [Economy: theory and practice], vol. 3, no. 47, p. 66—75 (in Russ).
17. Bierman, F., Kanie, N., Kim, R. E. 2017, Global governance by goal-setting: The novel approach of the UN sustainable development goals, Current Opinion in Environmental Sustainability, vol. 2. p. 26—31. doi:10.1016/j.cosust.2017.01.010
18. Rinne, J., Lyytimäki, J., Kautto, P. 2013, From sustainability to well-being: Lessons learned from the use of sustainable development indicators at national and EU level, Ecological Indicators, no. 35. p. 35—42. doi: 10.1016/j.ecolind.2012.09.023.
19. Banga, J. 2019, The green bond market: A potential source of climate finance for developing countries, Journal of Sustainable Finance and Investment, vol. 9, no. 1, p. 17—32. doi: 10.1080/20430795.2018.1498617.
20. Zimmerman, R., Brenner, R., Abella, J. L. 2019, Green infrastructure financing as an imperative to achieve green goals, Climate, vol. 7, no. 3, p. 39—52. doi: 10.3390/cli7030039.
21. Environmental Risk Analysis by Financial Institutions — a Review of Global Practice, 2016, An Input Paper for the G20 Green Finance Study Group, UNEP, available at: http://unepinquiry.org/wp-content/uploads/2016/09/2_Environmental_Risk_Analysis_by_Financial_Institutions.pdf (accessed 20.12.2020).
22. Frolova, E. E. 2020, Green bonds in the Nordic countries: features of development and legal regulation, Journal of the Belarusian State University. Law, no. 4, p. 43—48. (in Russ.)
23. Demirel, P., Li, Q. C., Rentocchini, F., Tamvada, J. P. 2019, Born to be green: New insights into the economics and management of green entrepreneurship, Small Business Economics, vol. 52, no. 4, p. 759—771. doi: 10.1007/ s11187-017-9933-z
24. Bogacheva, O., Smorodinov, O. 2018, Problems of “green” financing in the G20 countries, Mirovaya ekonomika i mezhdunarodnye otnosheniya [World Economy and International Relations], vol. 61, no. 10, p. 16—24. doi: 10.20542 / 0131-2227-2017-61-10-16-24 (in Russ.).
25. Khudyakova, L. S. 2019, Creation of a sustainable financing system in the European Union, Mirovaya ekonomika i mezhdunarodnye otnosheniya [World Economy and International Relations], vol. 63, no. 7, p. 16—22. DOI:10.20542/0131-2227-2019-63-7-16-22 (in Russ.).
26. Bokarev, A., Yakovlev, I., Kabir, L. 2017, “Green” investments in Russia: the search for priority areas, Finansovyi zhurnal [Financial Journal], vol. 6, no. 40, p. 40—49 (in Russ).
27. Persson, T., Tabellini, G. 2000, Political Economics. Explaining Economic Policy, Cambridge, MIT Press, p. 564.
28. D’Orazio, P., Popoyan, L. 2019, Fostering green investments and tackling climate-related financial risks: Which role for macroprudential policies? Ecological Economics, no. 160, p. 25—37. doi: 10.1016/j.ecolecon.2019.01.029.
29. Zademach, H.-M., Dichtl, J. 2016, Greening Finance and Financing the Green: Considerations and Observations on the Role of Finance in Energy Transitions. In: Jones, A., Ström, P., Hermelin, B. et al. (eds.) Services and the Green Economy, London, Palgrave Macmillan. doi: https://doi.org/10.1057/978-1-137-52710-3_7.