FINANCIALIZATION OF CLIMATE: FLEXIBILITY, FRAGMENTATION, AND THE FEEDBACK LOOP

Date

2025-12-29

Author

Varol, Ezgi

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This thesis examines the financialization of climate governance as a political response to the persistent gap between scientific consensus and effective global climate action. It examines the shift from attempt at binding caps of the Kyoto Protocol to flexible, market-oriented frameworks under the Paris Agreement and the delegation of climate responsibility to financial actors and markets. Drawing on political economy, the thesis demonstrates that this financialized regime does not operate neutrally but entrenches existing global hierarchies. It shows how the technical and institutional demands of market-based climate governance favor states in the Global North with greater administrative capacity, financial resources, and bargaining power. Conversely, countries in the Global South face structural constraints, including high verification costs, debt vulnerabilities, and conditional finance, which limit their policy space and reinforce patterns of dependency. The study provides a detailed analysis of Article 6 of the Paris Agreement, illustrating its role converts "mitigation outcomes" into transactable claims. The thesis identifies a "climate-finance loop" wherein climate vulnerability further restricting the fiscal space necessary for adaptation and mitigation for the Global South. Ultimately, the research concludes that the current architecture stabilizes policy fragmentation and perpetuates core-periphery asymmetries, suggesting that a just transition requires re-embedding climate governance in political decision-making rather than delegating it to market-based de-risking.

Subject Keywords

Financialization of Climate, Global Climate Governance, Paris Agreement, Flexibility, Climate-Finance Feedback Loop

URI

https://hdl.handle.net/11511/118291

Collections

Graduate School of Social Sciences, Thesis