Diffusion and innovation for transition: transnational governance in China’s green bond market development

Abstract

Green bonds, a new instrument of Chinese environmental economic policy, represents an important step in the country's effort to systemically transform towards 'ecological civilization'. The involvement of transnational actors alongside Chinese state actors make for a compelling case in examining green finance transitions as a phenomenon in global environmental governance. This paper leverages the transition management framework, adapting concepts from transnational governance, to develop a 'transnational transition management' lens with which a longitudinal analysis of the policy development cycle is viewed. In combination with social network analysis, we use this framework to explore the evolution of green bonds with diverse forms of secondary evidence. We identify a relationship between the rapid expansion of the Chinese green bond market with coalitions of policy makers and organizations in transnational spaces that catalyze policy diffusion and innovation through consensus building, coordinated experimentation, and distributed monitoring and evaluation; predominantly steered and led by the People's Bank of China. In addition, the political economy of actors in these networks help explain resistance to convergence with global green bond standards. This research suggests an agenda for examining the governance of green finance as an entry point to analyze and develop strategies for sustainability transitions in finance.

Treating ecological deficit with debt: The practical and political concerns with green bonds

“…Offering to redirect investment capital, their advanced market size places them in the vanguard of green financial innovation, and their successes and failures may well have far reaching socio-spatial consequences at a range of scales. This calls for us to consider the possibility of healthy credit and bad debt in closely scrutinising the green bond market's obstacles, opportunities, and socio-environmental impacts (Elliott & Zhang, 2019). This article contributes to this task with a multi-disciplinary review of green bond media articles, grey literature, and academic research.…”

Green growth assessment discourse on evaluation indices in the European Union

“…Green growth can be stimulated by increased fiscal spending on public goods, government expenditures on education, increased spending on R&D and innovation process (Lin, Zhu, 2019), substantial financial resources (Mohamed et al, 2014), environmental regulations, support for technology policies and consumer-awareness programs (Holroyd, 2014), market building and the effective workings of the market system (Wanner, 2015), development of infrastructure (Li et al, 2015), fossil fuel scarcity (De Cian et al, 2016), increased technological innovation and efficiency accompanied by foreign direct investments (Nasir et al, 2019), adoption of environmentally friendly technologies (Hille et al, 2019), creation of new, environmentally friendly industries (Dornan et al 2018), local capabilities (including technologies, institutions, skills) or single sector (Capasso et al, 2019), subsidies and tax incentive policies (Chang et al, 2020), creation of a favourable environment for long-term green investment (Guo et al, 2018;Adeel-Farooq et al, 2018;Geisendorf, Klippert, 2017), building a green finance system , economic openness and R&D scale (Song et al, 2019), growth of a green bond market (Elliott, Zhang, 2019;Ngwenya, Simatele, 2020).…”