Rentiers of the Green Economy? Rethinking Finance and Ownership Models for a Low-Carbon Transition

Within debates over the regulation of climate-related financial risk and pathways for funding a just low-carbon transition, existing models of urban finance and ownership are increasingly in question. On the one hand, influential players like the World Bank look to the United States, among other financialized contexts, for innovations to export and adapt to urban climate challenges worldwide. On the other hand, widely exported models like value capture finance face deepening crises ‘at home’ across many US cities.

Not only are mounting climate threats deepening preexisting strains in the US’s settler colonial property and fiscal regimes, but progressive climate and racial justice movements are challenging many of the underlying assumptions and priorities animating these regimes and their inherited tools. In crucial ways, the financing and provisioning instruments that governments adopt to respond to climate crisis will lock them in to certain climate futures, more or less just.

I explore this claim using two central examples from US ‘climate finance’, broadly understood. First, I examine the US federal government’s existing toolkit for subsidizing renewable energy development, a model that promotes and depends upon legal tax sheltering by a class of ‘tax equity’ rentiers, a handful of the US’s largest banks. Second, I examine a major tool proposed for ‘climate proofing’ investments in US residential property, property assessed clean energy (PACE). Both financial models constitutively favor private ownership over alternative possibilities and livelihood realities. Meanwhile, both classes of property face existential threats in many US cities, as climate-related financial risks and crises of insurability threaten large-scale devaluation.

The Speaker: 

Sarah Knuth is an Assistant Professor in the Department of Geography at Durham University. Her research focuses on critical geographies of climate change and energy transition, finance and the green economy.