How to Re-Conceptualize and Re-Integrate Climate Finance Into Society Through Ecological Accounting?

37 Pages Posted: 30 Nov 2020 Last revised: 1 Dec 2020

See all articles by Alexandre Rambaud

Alexandre Rambaud

University of Paris-Saclay - AgroParisTech; CIRED, International Research Center on Environment & Development, France; Université Paris Dauphine

Hugues Chenet

University College London - UCL Institute for Sustainable Resources; Chair Energy and Prosperity

Date Written: October 15, 2020

Abstract

In this paper, we argue that current finance, and the prevailing fair value accounting system, is disconnected from companies and from strong sustainability requirements, making it difficult to develop a climate finance system that is operational and aligned with the challenges of climate preservation. Based on this observation, we propose an exploratory and theoretical study which introduces how and why a particular and innovative ecological accounting approach, the CARE model, currently called upon by a growing number of practitioners and researchers, is a relevant framework to re-conceptualize the issue of climate finance. From a theoretical point of view, CARE offers a suitable language for structuring the issues of ecological costs, debts and conservation and associated financing. From a practical point of view, it offers a methodological support that can be used to address these issues, from an accounting and management point of view as well as from an investor's point of view, ensuring compliance with the Paris Agreements 2°C goal in particular.

Keywords: climate finance, natural capital, historical cost accounting, corporate finance, ecological accounting

JEL Classification: Q57, Q56, M4, G3, Q54

Suggested Citation

Rambaud, Alexandre and Chenet, Hugues, How to Re-Conceptualize and Re-Integrate Climate Finance Into Society Through Ecological Accounting? (October 15, 2020). Available at SSRN: https://ssrn.com/abstract=3725538 or http://dx.doi.org/10.2139/ssrn.3725538

Alexandre Rambaud (Contact Author)

University of Paris-Saclay - AgroParisTech ( email )

16 rue Claude Bernard
Paris, 75005
France

CIRED, International Research Center on Environment & Development, France ( email )

Campus du Jardin Tropical
45 bis avenue de la Belle Gabrielle
F94736 Nogent sur Marne Cedex
France

Université Paris Dauphine ( email )

Place du Maréchal de Tassigny
Paris, Cedex 16 75775
France

Hugues Chenet

University College London - UCL Institute for Sustainable Resources ( email )

Gower Street
London, WC1E 6BT
United Kingdom

Chair Energy and Prosperity

France

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