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Palgrave Macmillan

The Political Economy of Green Bonds in Emerging Markets

South Africa's Faltering Transition

  • Book
  • © 2023

Overview

Authors:
  1. Manuel Neumann

    1. Political Science, University of Kassel, Kassel, Germany

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  • Debunks some of the promises underpinning green bond markets and traces manifold practices
  • Identifies some barriers prohibiting the expansion of green bonds in emerging markets
  • Discloses the idiosyncratic political economic challenges of a fossil-based economy in transition

Part of the book series: International Political Economy Series (IPES)

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Table of contents (6 chapters)

  1. Front Matter

    Pages i-xvii
    Download chapter PDF

  2. Green Bonds and the Long Way to Paris

    • Manuel Neumann
    Pages 1-14

  3. What Do We Already Know About Green Bonds? A Literature Review

    • Manuel Neumann
    Pages 15-40

  4. Towards New Approaches of Understanding the Greening of Capital Markets

    • Manuel Neumann
    Pages 41-86Open Access

  5. The Political Economy of Greening South Africa’s Capital Markets

    • Manuel Neumann
    Pages 87-112

  6. A Stalling Green Bond Take-Off

    • Manuel Neumann
    Pages 113-247

  7. The Limits of Green Finance in Fossil-Based Emerging Economies—Lessons Beyond South Africa

    • Manuel Neumann
    Pages 249-275Open Access

  8. Back Matter

    Pages 277-281
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Keywords

About this book

Funding low-carbon transitions to address climate change is one of the major challenges of our time. Green bonds have emerged as a powerful tool to enlist institutional investors’ wealth for these transitions. But despite exponential growth in many parts of the world, the green bond market in South Africa has been stalling. This book project grapples with this puzzle. Firstly, it debunks some of the promises underpinning green bond markets and traces the manifold practices undergirding its promotion. Secondly, it identifies some barriers prohibiting the expansion of green bonds in emerging markets and zooms in on the depoliticizing tendencies a transition premised on financial innovation produces. Thirdly, this work discloses the idiosyncratic political economic challenges of a fossil-based economy in transition and shines a light on the competing elements of a ‘green’ and a ‘just’ transition. It argues that the limited uptake of green bonds can best be explained by the instrument’s inability to adequately incorporate the various demands levied on South Africa’s contested transition trajectory. In so doing, this book contributes important new qualitative insights into green bond markets-in-the-making and extends political economic scholarship on finance-led transition endeavors in emerging markets.

Chapters 3 and 6 is available open access under a Creative Commons Attribution 4.0 International License via link.springer.com.

Reviews

Much hope has been placed in finance as a driver of low carbon transitions. Through a meticulously detailed analysis of the attempt to generate a green bond market in South Africa, Neumann shows brilliantly the limits of this approach. This book is a must read to understand the pitfalls of relying solely on financial innovation to solve the climate crisis.

- Matthew Paterson, Professor of International Politics, University of Manchester

This book brilliantly unpacks a crucial question: why have green bonds failed to support at required scale a finance-led green transition in South Africa? It examines political and institutional obstacles, distributive struggles and limits to the nascent derisking state. It is required reading for scholars of just transitions in the Global South.

- Daniela Gabor, Professor of Economics and Macro-Finance, UWE Bristol

Africa is the least climate-resistant continent in the world. Yet not so much has been done by the global communityto help overcome this deficiency. Efforts by advanced industrial economies have been negligible, and climate finance commitments have been half-hearted. This work offers tremendous insights into innovative financial instruments that could help bridge the yawning gap between Africa’s infrastructural demands and supply of finance. It is also an emphatic call for rethinking finance to advance a just energy transition. These insights could open up new avenues of collaboration between the government, the private sector, and global development partners to promote Africa’s resilience in the face of harsh climate change realities and resource constraints.

- Mzukisi Qobo, Associate Professor and Head of Wits School of Governance, University of the Witwatersrand

Climate change has increasingly been framed as a financial problem. But climate finance, and green bonds in particular, will contribute little unless their political and social constitution is more widely acknowledged. Drawing on cultural political economy, financialization and transition studies, Manuel Neumann’s book provides a significant step into this direction. A truly enlightening and empirically rich account of a green bond market that wasn‘t and the political economy of low-carbon transition in South Africa. 

- Daniel Mertens, Professor of International Political Economy, University Osnabrück

Using the example of South Africa’s “stuttering” green bond market, this important and compelling book provides fresh insights into the political economy of climate finance in emerging and developing countries. Drawing on detailed field research, Neumann uncovers a series of interlocking constraints which have prevented the country from replicating a trajectory of rapid green bond market growth witnessed elsewhere. He furthermore exposes the limits of financing instruments predicated on narrow, financialized logics within a highly politicized context where low carbon and just transitions call for more fundamental social and economic reform. Both empirically rich and theoretically rewarding, this book is essential reading for anyone interested in the unfolding dynamics of climate, green and sustainable finance in the Global South.

-Dr Richard Perkins, Associate Professor, Department of Geography and Environment, London School of Economics and Political Science (LSE)

Authors and Affiliations

  • Political Science, University of Kassel, Kassel, Germany

    Manuel Neumann

About the author

Manuel Neumann is a Research Fellow at “Glocalpower”, a research group anchored in the Department of Political Science at Kassel University, Germany. He successfully defended his PhD at University of Kassel and holds a master’s degree in Globalisation and Development from SOAS (University of London). His research features in peer-reviewed journals like the ERSS and Politics & Governance and revolves around the political economy of energy transitions in the global South more generally and green financial tools in particular.

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