Can the law be the key to greening the economy?

Erasmus School of Law (Photography: Michelle Muus)

On 4 November 2021, the first keynote speech of the Piet Sanders Lecture Series was given by Katharina Pistor, Edwin B. Parker Professor of Comparative Law and Director of the Centre on Global Legal Transformation at Columbia Law School. In her speech Greening the Economy: Gimmick or Game Changer she advocated taking greening seriously and restructuring the system to make a change.

The hybrid event was organised as a tribute to the honorary doctorate Katharina Pistor received from Erasmus University Rotterdam in 2020, in recognition of her pioneering multidisciplinary research on the relationship and interaction between finance, financial markets, and law. 

There is such a thing as being too late

After a warm welcome by Suzan Stoter, Dean of Erasmus School of Law, honorary promotor Fabian Amtenbrink emphasised the significance of greening in our current world: “Climate change and its consequences are amongst the biggest problems of our time. For many of us and our children there is a great urgency to change the tide, as there is such a thing as being too late. We need to take greening seriously, and quick fixes are out of the question. But greening has all the characteristics of a wicked problem and leads to many questions we must answer. Such as, how do we overcome the multitude of conflicting interests? Are the current government systems able to address and fix this problem? And is the law part of the problem, or can it facilitate greening and meditate conflicting interests?” After his speech Amtenbrink introduced honorary doctor Katharina Pistor.

Rethinking capitalism

Pistor started her speech by explaining the principle of greening and the way it is often misused: “Greening is about actions taken to respect and preserve the ecological boundaries of Planet Earth and preserving and protecting both human and non-human life. Unfortunately, the process of greening the economy and specifically capitalism is very prone to gimmicks, such as greenwashing and subsidies for destructive processes.” Pistor emphasised the problems which occur due to a lack of liability: “Capitalism has, over time, developed into a system that is incompatible with combatting climate change. The limited liability of organisations enables them to still take actions that are not in line with greening goals”.

Using the current system is a waste of time according to Pistor: “There are a couple of cases where actions were taken to keep organisations responsible for their actions, but there is no time to fight them case by case. The system has to be restructured to ensure that organisations have an incentive to take action in favour of greening goals”.

Concluding her speech, Pistor addressed the cause and a possible solution to the problem: “In capitalism, assets are given attributes, such as priority, durability, and convertibility, through judiciary models. You could say that in the code of capital, lawyers are the coders. Therefore, the law can be seen as the way to combat this problem. To restructure the system, provide a new liability regime and stimulate parties to take collaborative problem-solving actions.”

A different perspective

The event was concluded by a discussion with panel members Martin de Jong, Professor of Dynamics of Inclusive Prosperity at Erasmus School of Law and Rotterdam School of Management, and Mary Pieterse-Bloem, Professor of Financial Markets at Erasmus School of Economics. Both panel members brought a different perspective to the issue of greening the economy, and the questions from the audience resulted in a fruitful discussion on the effectiveness of incentives, the necessary changes in governmental structuring and education and the allocation of responsibility for change.

More information

You can watch the full keynote speech and panel discussion here.

More information about the Piet Sanders Lecture Series can be found here.

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