Climate, Finance, and Geopolitics: Human Self-delusions and the Challenges for Europe Briefings de l'Ifri, December 11, 2023
The combination of geopolitical tensions, climate disruption, and the growing role of finance in the economy is taking us into uncharted territory. Until recently, each of these subjects was handled separately, but they are now inextricably linked by two shared characteristics: the gravity of the threat, and the fact that they all lay bare the scale of human self-delusions.
There are also interactions between them: between climate and finance, since states have a tendency to pass this “hot potato” onto the private financial sector; and between geopolitics and finance, because money remains the “sinews of war” and debt is a vulnerability, especially for any actor wanting to exercise full sovereignty. These issues are particularly acute for the European Union (EU) that is still a work in progress.
- Finance, climate science and geopolitics were once separate subjects. Now linked, their commonality is that they reveal the illusions of those who, in the 20th century, thought they had mastered finance, tamed nature, and prevented war.
- The financialization of the economy, climate change and the resurgence of armed conflict have exposed these illusions and call for a new awakening.
- With planetary limits about to be reached, it will not be enough to rely on finance alone. Similarly, the rise in geopolitical risks calls for resources which, in a context of high indebtedness, are no longer available to governments.
- For Europe, which is facing these challenges without being solidly constituted, the challenge is even greater, but across the globe it is high time to ask questions about exacerbated national sovereignty and the lack of respect by governments for the commitments they have made.
This Briefing is also available in French: Climat, finance, géopolitique. Les illusions des hommes, les défis de l’Europe.