Public Sustainable Finance: von nachhaltigen Finanzmärkten zur sozialökologischen Transformation

In this article, we argue for “public sustainable finance,” in which the state has a central role to play for maximum transformational impact. To date, sustainable finance has focused on ESG criteria, divestment, voting, engagement, and impact investing. The goal is to mobilize private capital by “de-risking” private investments through public funds. Government action in the form of direct financing is not considered in the current discussion on sustainable finance. We argue this is due to an implicit reference to mainstream economic theory: according to the New Consensus model, an overly active state leads to time inconsistency problems and crowding out effects. The theoretical assumptions are also reflected in the current institutional framework in the form of the EU’s Maastricht Treaty and the German debt brake. However, these assumptions based on the loanable funds theory have been sufficiently refuted in recent years. Loans arise out of thin air and can provide additional public investments, which in turn lead to increased private investment (crowding in). It is true that a reform of the debt brake is unlikely at present. However, public investments in climate protection and renewable energy can be made possible within the current debt brake regime by means of exceptions. To this end, we propose that the Climate and Transformation Fund (KTF) be given its own borrowing powers. By borrowing 162 billion euros by 2030, the existing financing gap can be closed and important investments in the future can be made