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Financial Markets and the Transition to a Low-Carbon Economy: Challenging the Dominant Logics


  • Céline Louche

    () (Audencia Business School)

  • Timo Busch

    (University of Hamburg)

  • Patricia Crifo

    () (UPN - Université Paris Nanterre)

  • Alfred Marcus

    (University of Minnesota [Twin Cities] - University of Minnesota System)


Financial markets play a major role in contributing to the transition to a low-carbon economy. Although many initiatives and developments are taking place, this is just the beginning. In this article, we argue for a theory of change—a theory rooted in logics that will help financial markets play a key role in the transition to a low-carbon economy. We argue that the current dominant logics in finance—short-termism, predictability of the future based on ex-post data, price efficiency, and risk-adjusted returns—impede the effective integration of climate considerations in financial markets. We suggest four alternative logics that can enable and foster a change toward the low-carbon economy: long-termism, systems interconnectedness, carbon price dynamics, and active ownership.

Suggested Citation

  • Céline Louche & Timo Busch & Patricia Crifo & Alfred Marcus, 2019. "Financial Markets and the Transition to a Low-Carbon Economy: Challenging the Dominant Logics," Post-Print hal-02016756, HAL.
  • Handle: RePEc:hal:journl:hal-02016756
    DOI: 10.1177/1086026619831516
    Note: View the original document on HAL open archive server:

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    Cited by:

    1. D'Adamo, Idiano & Falcone, Pasquale Marcello & Imbert, Enrica & Morone, Piergiuseppe, 2020. "A Socio-economic Indicator for EoL Strategies for Bio-based Products," Ecological Economics, Elsevier, vol. 178(C).
    2. Monk, Alexander & Perkins, Richard, 2020. "What explains the emergence and diffusion of green bonds?," Energy Policy, Elsevier, vol. 145(C).
    3. Amparo Soler-Domínguez & Juan Carlos Matallín-Sáez & Diego Víctor de Mingo-López & Emili Tortosa-Ausina, 2020. "Social responsible mutual funds and lowcarbon economy," Working Papers 2020/15, Economics Department, Universitat Jaume I, Castellón (Spain).
    4. Salome Zimmermann, 2019. "Same Same but Different: How and Why Banks Approach Sustainability," Sustainability, MDPI, Open Access Journal, vol. 11(8), pages 1-20, April.


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