Towards a post-growth green macro-financial regime? Implications for the Global South of imperfect technologies and sufficiency policies in the Global North

This paper assesses perspectives for green macro-financial regimes (MFRs) and implications for the Global South amidst ongoing atmospheric appropriation by the Global North and plummeting climate expert confidence in “green” growth. Reviewing recent critical macro-finance literature on “green” MFRs, the paper notes this literature has not yet integrated several key structural constraints for a Paris-compatible “transition” identified by climate science and post-growth scholarship: (1) the imperfect nature of climate mitigation technologies, such as negative emissions technologies, which cannot be timely deployed at the required scale, (2) the need for demand-adverse sufficiency policies for limiting global warming to well below 2°C, (3) the growth dependence of capitalist economies and (4) the role of states in upholding societies’ growth orientation, both preventing radical discipline of (dirty) capital and demand-adverse sufficiency policies. Consequently, this literature approaches the “green transition” mainly as a financial balance-sheet challenge by asking “which MFR can best discipline dirty capital and deliver the required “green” investment in (perfect) decarbonization technologies?” Instead, this paper asks “what MFR can best discipline private capital and support sufficiency policies reducing private production and consumption in the Global North to complement the insufficient emissions mitigation that can reasonably be expected from higher investment in (imperfect) “green” technologies?” This paper argues that growth-dependent MFRs cannot sufficiently discipline private capital and support the demand-adverse sufficiency policies required in the Global North, because their stability and viability depend on continued growth, and hence that such MFRs cannot deliver Paris-compatible climate stabilization. On that basis, the paper examines the conditions of possibility for a post-growth green MFR. Drawing lessons from “developmental states” and war analogies for disciplining private capital, rapidly reshaping investment and reducing private consumption in high-income countries, as well as from concepts and experiences of democratic planning, it provides a new conceptualisation of green MFRs and proposes a 4-step sequence of policy interventions for moving away from market coordination and growth dependence. It then describes the main institutional and policy features of a post-growth MFR. Finally, the paper discusses some material, monetary and power implications for the Global South based on stylized facts. Notably, it highlights how halting ongoing atmospheric appropriation by the Global North and South-to-North material drain under a post-growth regime could foster sufficiency-augmented carbon budgets preserving necessary industrial development space in the Global South, promote South-South trade, and contribute to leveling ecological and monetary hierarchies.