Modern finance theory and practice and the Anthropocene

Abstract

ABSTRACT The Anthropocene, as a geological epoch, has come to be defined in terms of the variability within the Earth System’s operations as measured through various markers such as surface temperatures and CO2 emissions. These variations are generated by human activity, characterised by catastrophic processes and outcomes, and beyond any previous natural variability. This paper focuses on how modern finance theory and practice respond to one of the overflows that it has helped generate – namely, adverse anthropogenic effects such as climate change and soil degradation. Although modern finance theory and practice are capable of generating alternative socio-technical arrangements such as socially responsible investing and abatement markets to alleviate such adverse effects, these alternatives, for the very fact of their embeddedness in the financialised form of thermo-industrial capitalism, are prone to suffer from what some scholars describe as capitalism’s creative self-destruction.