Browsing by Subject "Two Level Game Approach"

EU-China search for common understanding on what activities should be considered “green” and eligible for financing by green bonds started recently. Common understanding could, according to negotiation parties, facilitate greater cross-border flow of green finance. As China and EU together lead the global green bond market, a common understanding could even enhance much sought after harmonization of green bond rules at global level. This study examines how realistic and influential the search mission for common EU-China green bond language is, filling gap in research on green bonds in the EU-China context. Analysis is based on multimethod approach combining qualitative standard comparison, interviews and media analysis. The work is carried out applying a liberal two level game approach (Putnam, 1988), from the field of International Political Economy, which has proved useful when analysing domestic-international dynamics present in international negotiations on e.g. energy, climate and environmental policy. Based on the analysis, where China balances with fear of slowing economy, growing energy demand and urgency to fight pollution, the EU can already afford to focus on the climate change combat. This difference is reflected, based on the analysis, in the regulations the two regions have recently developed for green bonds. With preferences not aligning, it may prove difficult to find aligning views on the types of projects eligible for green bond financing. This means that the domestic win sets (Putnam, 1988) of the two regions don´t currently overlap implying that a common EU-China agreement on green bond rules may at the moment be impossible. However, even with a fully aligning views on green bond definitions and rules, the cross-border green finance between the EU and China would likely not increase significantly as there are other market barriers that hinder the flow at present. Nevertheless, having the EU-China dialogue was still viewed to enhance climate change cooperation and raise awareness.