Financing Renewal under Decarbonisation Imperatives..

Financing Renewal under Decarbonisation Imperatives and Transforming Institutional Legacies in Hauts-de-France and Saxony  with Sabine Dörry (LISER) & Christian Schulz (Luxenburg).

Abstract

We examine how Hauts-de-France in France and Saxony in Germany are navigating comprehensive ‘green’ transformations, responding to the European Green Deal’s demands. Both regions, significantly reshaped by economic restructuring in the 1980s, now face the imperative of transitioning to sustainable economies. Our analysis focuses on the role of public actors and their financial strategies, assessing how these actors might create new dependencies or perpetuate existing inertia in regional development strategies. A key aspect of our investigation is whether EU and national/regional governments risk repeating past short-term solutions, such as deploying massive public subsidies to attract foreign direct investment (FDI). This is evident in schemes like the EU’s ‘Important Projects of Common European Interest,’ which aims to stimulate significant investments.

The legacy of de-industrialisation and mass unemployment has left a cautious stance among private investors, leading public agencies – particularly the European Investment Bank and the French and German national development banks – to spearhead the necessary financing. This approach highlights the geopolitical risks associated with new large-scale projects. Although our discussion briefly addresses these repercussions, we unpack the ‘green’ investment processes and public actors’ roles therein. We use empirical insights to explore how financial strategies inspired by policy programs like the Green Deal might overshadow their core promise: achieving a just and rapid decarbonisation transition for historically industrial regions.

Sabine Dörry is a financial geographer working at the Luxembourg Institute of Socio-Economic Research (LISER). Her work focuses on the financial industry and is interested in developing alternative ways to analyse the global financial system, and how shifts towards “sustainable finance” and technological immersion affect financial activities, institutions and regional development.

Christian Schulz is a Full Professor of European Sustainable Spatial Development and Analysis at the University of Luxembourg (since 2006). He is an economic geographer specialised on issues around environmental sustainability and his current research foci are in the fields of socio-ecological transitions and the role of sufficiency-oriented practices.