Wall Street Consensus a la Française

Since his election in 2017, French President Emmanuel Macron has periodically committed to resetting France’s relationship with Africa. In 2020, his so-called Macron Doctrine denounced the Washington Consensus for creating a “capitalism that has become financialized, that has become over-concentrated, and that is no longer capable of handling the inequalities in our societies and internationally.” He called instead for a Europe-Africa partnership of equals to underpin the material and ideological work that would reverse financialized capitalism and its destruction of the climate. 

Then, in October 2021, he hosted the Africa-France summit in Montpellier. Under the guise of “reinventing” the relationship between France and its former colonies, Macron decided not to engage with African heads of state as usual, but rather with a new body of “civil society” figures that he had assembled, ostensibly representing the continent’s peoples and “the African youth.” More recently, ahead of a Central African tour this March, Macron promised that France would be more “humble” towards an African continent that is no longer a “private backyard” or a “competition ground.” He would create a legal framework for the restitution of African stolen artifacts and shrink the French military presence on the continent, in light of its failure in the Sahel region and the growing resentment it fed there. Macron also reminded the world that France’s climate partnership with Africa was making good progress. In particular, he highlighted the One Forest Summit (OFS) co-hosted by France and Gabon in Libreville on March 1 and 2, the first stop on his African tour. 

The OFS aims to create an institutional framework for protecting tropical forests that help absorb carbon emissions and preserve biodiversity. France plays a pivotal role, co-chairing with Costa Rica the High Ambition Coalition for Nature and People (HAC), an initiative launched at the One Planet Summit in 2021. The coalition of more than 100 states vows to protect 30 percent of the world’s land and sea by 2030. In Libreville, at what participants termed the Implementation Summit, the OFS presented its three-pillar strategy for forest protection: unlocking innovative sources of funding via (voluntary) nature markets, fostering sustainable value chains, and promoting scientific cooperation on rainforests. 

It is in the first pillar—promoting biodiversity-positive carbon credits and nature certificates—that Macron’s African agenda reveals itself for what it is: the French arm of the Wall Street Consensus, the derisking-as-development paradigm. In partnership with a choir of derisking evangelists that includes multilateral development banks like the World Bank, conservationists, philanthropists like the Bezos Earth Fund, lobby organizations like Nature Finance, and (French) financiers like Meridiam and Mirova, Macron is promising delivery from deforestation, biodiversity loss, and even sustained fossil fuel consumption. His plan aims to meet these ambitions through innovative market instruments that promote private investment in nature, turning it into an asset class in an “investability” partnership with the state.  

The derisking evangelists that Macron accompanies to Gabon are not unlike the missionaries of the colonial period. Then, the great Burkinabe historian Joseph Ki Zerbo once remarked, the historical sequence of colonialism involved Merchants, Military, and Missionaries. French missionaries in the nineteenth century actively cooperated in the imperial expansion of France in Africa, “ardently patriotic, eager for government subsidies, and cognizant of the benefits for their work in the colonies and foreign territories that would accrue from government support, ardently courted government favor.” A similar logic animates derisking evangelists today. Under Macron’s protective shadow, they have contended with the systemic greenwashing hardwired in the production of nature asset classes by producing the narrative of a bumpy road towards the inevitable achievement of equitable, nature-positive outcomes. But the broader strategic aim behind this narrative is the construction of the visible derisking hand of the state—the roll-out of the Wall Street Consensus. The aim is to refashion the state to scale up the financialization of nature mainly for the benefit of global North capital.

Setting the scene: the One Forest Summit in Françafrique Gabon

Gabon gained its independence from France in 1960 but continues to maintain neo-colonial relations with the former metropole. French armed forces remain in the country, notably to “secure” the dynastic regime—first of the now deceased Omar Bongo Ondimba, former friend, advisor, and electoral financier of French politicians, and now his son, President Ali Bongo Ondimba—from a population that might vote for a democratic move away from the neocolonial order. France’s interests there are economic: among the top five oil producers in Africa, Gabon remains a member of the CFA franc area, and supplies France with three main types of products: natural hydrocarbons, metal ores (manganese), and wood. The Franco-British group Perenco, France’s number two oil company, has been the main oil company in Gabon since it bought some assets from Total in the 2010s. The Compagnie Minière de l’Ogooué (COMILOG), which is 63.7 percent owned by the French company ERAMET, extracts 90 percent of the manganese from the Gabonese subsoil. 

Some environmental activists, such as Bernard Christian Rekoula, who had to leave Gabon for fear of persecution, see the OFS summit as a full-scale “greenwashing” ceremony. By contrast, the OFS documents and participants downplay greenwashing as unavoidable, part of the process of leveraging the necessary private resources for biodiversity.

Derisking evangelists on greenwashing: bumps in the road

Voluntary nature markets have recently become fashionable tools to safeguard and restore forest ecosystems for “environmental, economic, cultural, and social benefits.” Their necessity is constructed as a macrofinance question: financiers computed a yearly USD 200 billion “nature financing gap” up to 2030 and claimed that it cannot be covered by public resources. Instead, scarce fiscal resources should be “used wisely to catalyze additional private finance and increased action and effectiveness,” to quote the Innovative Finance for Nature and People Report prepared for the One Forest Summit. Catalyze is a synonym for derisking: the market on its own cannot conjure the financial instruments that would generate, at timely scale, the resources to fill in that gap because risk-adjusted returns are not attractive enough for private investors. As the price signal fails, the state intervenes to “derisk,” that is, to introduce fiscal or regulatory interventions that steer the price signal in nature markets, including voluntary markets, towards a level better aligned with investor preferences. 

The logic at the core of the voluntary nature markets is that participants trade “credits” which are issued to value (or monetize) conservation interventions that “increased CO2 removal or reduced emissions commensurate with the number of credits issued.” Buyers—say, large corporations with net-zero commitments—can then claim to be voluntarily offsetting their own carbon footprint by investing in the protection and restoration of biodiversity elsewhere. 

Rather predictably, the incentives at play are for certification agencies, issuers, and buyers to engage in systemic greenwashing. For instance, a recent Guardian investigation revealed that only 10 percent of the carbon credits issued by Verra, the world’s leading carbon standard setter for the voluntary offset market, had a verifiable claim to have removed or decreased CO2 (or additionality). The rest were greenwashed “phantom” credits. 

To its authors’ credit, the OFS Report accepts greenwashing as legitimate criticism of voluntary markets. It also stresses the importance of genuinely involving indigenous communities, another matter of substantive critique towards nature as an asset class projects, presumably responding to challenges from environmental organizations like Survival International, who have termed the Conservation Agenda as “new green colonial rule,” and to research that uncovered the militarism and violence against grassroots communities and their management practices. Indeed, African indigenous communities have opposed land-grabbing exercises that seek to commit African countries to set aside between 35–42 percent of their national territories exclusively for wildlife and biodiversity (compared to 12.45 percent in the US).

Despite this acknowledgement, the OFS report maintains such problems are “growing pains” to be overcome by a stronger institutional framework for certification and monitoring, and by innovative financial instruments like nature certificates that do not rely on complex additionality modeling but instead strive to provide the buyers with “entirely positive contributions to biodiversity.” (A recent paper by Katie Kedward and colleagues argued that the high transaction costs associated with rigorous regulation of nature markets are fundamentally at odds with competitive returns and scalability.) On the first day of the summit, difficult questions were handwaved away, with the notable exception of the Costa Rican delegate. 

Scaling up the visible derisking hand of the state

The finance discussions on day one of the summit focused on the question of scalability. These echoed concerns that the growing controversies around greenwashing were further threatening the already limited incentives that corporations had to massively scale up demand for credits and certificates to the hundreds of billions in private financing promised in climate fora. The CEO of the lobbyist organization Nature Finance (and until recently Sherpa of UN Secretary General’s Task Force on Digital Financing of the Sustainable Development Goals) Simon Zadek lamented that “voluntary demand will not deliver timely scale.”  

The solution, Zadek suggested, was to recognize “the need to set prices through a policy architecture rather than a market architecture.” In other words, voluntary markets for credits and certificates were destined to fail on their own, unable to generate the price signal that would attract demand and increase volumes traded to the ambitious levels set out in the “financing gap” discourse. The state would have to step in with a policy architecture that could make the numbers work for private investors.

This call perfectly encapsulates the logic of the derisking state as a set of interventions that tinker with price signals at the asset level, of institutionalizing practices for shifting price signals to both facilitate capital accumulation and rationalize (financial) capitalism. In essence, this means fiscal subsidies layered on top of regulations, as the OFS Report spells out: 

Scaling up demand is a challenge, and rests upon shared and robust principles for defining and verifying credits/certificates, consensus on the proper use of credits/certificates, mechanisms to safeguard the market’s integrity, engagement of new partners, clear long-term demand and price signals, and policy and regulatory mechanisms, including fiscal incentives. While some voluntary schemes, including nature-based carbon credits, have markedly grown in volume and have the potential to further grow, large scale has mainly been achieved as a result of regulations or government financing, underscoring their importance in achieving scale.¹

It is important to stress that regulations can involve both compliance with carbon markets (sticks) and an enabling environment that eases the issuance of credits (carrots). But in Gabon, as elsewhere, derisking evangelists have conjured a state that replicates the price mechanism of a competitive order without disciplining the private recipients of subsidies and guarantees. This “carrots without sticks” strategy at the core of the Wall Street Consensus is increasingly ubiquitous in decarbonization debates and policies, from the US Inflation Reduction Act to the European RePower initiative. Equally important, it aims to displace the demonstrably more effective alternative: the provision of ecological public goods via well-targeted public investments in the environment and its protection. 

The One Forest Summit concluded with the announcement of the Libreville Plan. Among its initiatives, the Partnership for Positive Conservation aims to establish the policy architecture for scaling up the market for biodiversity certificates. France, Gabon, and the United Kingdom will together set up an intergovernmental platform to guarantee the environmental integrity of the certificates. On top of regulatory derisking, France, Conservation International, and the Walton Foundation (Walmart) committed to add EUR 100 million in public and philanthropic financing to increase demand for certificates. The visible derisking hand of the state, En Marche!