Economic geographer explores whether the financial sector can help solve our multiple environmental crises

Dr Patrick Bigger is “interested in the variety of ways financiers are trying to fix environmental problems and get rich doing it”.

Patrick, who joined the Lancaster Environment Centre at Lancaster University earlier this year, became fascinated by the relationship between the financial sector and the world’s environmental crises during the financial crash of 2008. In 2012 he got PhD funding to spend time in Sacramento, studying the politics around the creation of California’s carbon trading system. He concluded that not many people were going to get rich through carbon trading.

“These are usually not markets in the way that we might think of super speculative financial markets: they more often behave as fees to pollute. This is true not only for the Californian carbon market, but for all manner of tradable permit systems - everything from biodiversity conservation to access to landfills.

“A lot of this has to do with the competing motivations of the people who designed the market; there have to be so many political workarounds and big swathes of industry get exempted.”

Today Patrick’s research is focussed on two private sector financial tools that are being developed to help ‘address’ environmental problems: Biodiversity Finance and ‘Green’ Climate Bonds.

Working with Associate Professor Jessica Dempsey from the University of British Columbia and funded by the Canadian Social Science and Humanities Research Council, Patrick has travelled to Kenya to study how financiers are trying to make a dent in Africa’s biodiversity crisis.

“I’ve been following the money from deep pocketed folk in New York and London to Kenya, where they are investing in businesses which are trying to reduce the damage done by livestock grazing and poaching. I’ve talked with fund managers and financiers about the challenges of making biodiversity profitable”

Patrick’s second main research study, on Green Bonds, is part of a larger project on reconceptualising the relationship between financial risk and climate change, directed by Dr Brett Christophers at Uppsala University and funded by the Swedish Research Foundation.

Green Bonds are issued by a city, company or country to finance low carbon infrastructure.

“Green Bonds were only invented in 2007 and have really exploded recently with more than $110 billion of Green Bonds created in the past year,” says Patrick, who describes himself as an economic geographer.

Patrick has been studying the Green Bond market in the UK and Scandinavia, and more recently in New York and cities in Africa and South East Asia. He traces where the Bonds are being issued, and what the money raised is being spent on.

“In some cases they are probably doing genuine environmental good but in others they are bordering on green washing: this is one of the major challenges asset classes face, maintaining environmental integrity.”

Patrick accepts that the market oriented approach may offer some benefits, sometimes for unanticipated reasons

“For example, tradable permits for pollution may not make a big impact on their own, but giving regulators the tools to better understand the causes and consequences of that pollution may lead to the successful implementation of other, non-market, kinds of policy.”

“Just the process of building markets can develop tools that are useful for environmental regulation and components that are helpful. For example in cap and trade markets, it is always cap that does the environmental work, the trade part is meant to be the efficiency gain.”

But he is not convinced that market solutions provide the best approach.

“One of main justifications in using markets for dealing with environmental problems is that they simplify regulation but my research suggests that they often end up creating a much bigger environmental apparatus than if you use the conventional tools of environmental regulation.

“In the end I think there are more efficacious ways of achieving the environmental benefits, and that Governments need to be more ambitious in setting higher environmental targets.