Financing a green transition
Related Topics
Related tags
- Mitigation ,
- Business & Industry ,
- Finance
Author
Quantitative easing, the mechanism used across the developed world to stimulate economies after the 2008 financial collapse, is being championed in a report for the European parliament as a way to boost the green economy.
The procedure involves central banks pumping money directly into the economy, usually by buying assets from financial institutions so they can raise the amount they lend. In his report, professor Victor Anderson of Anglia Ruskin University argues that "green quantitative easing" (GQE), whereby the money created is used specifically to boost the green sectors of the economy, would help Europe move towards a sustainable economy.
"The Bank of England has a duty to play its part in helping the shift towards a greener economy no longer dependent on dirty sources of energy," he says. "EU governments should be urgently examining every type of policy that could be used to help in this low-carbon green revolution. GQE deserves to be near the top of their action list."
The GQE advocated in the report would entail central banks buying debt from private sector businesses, local and regional governments, and social enterprises, where the organisations can demonstrate that money will be used for green purposes. Rather than boosting banks' reserves and profits, which has been the main outcome of the recent conventional quantitative easing, GQE would boost the green sector of the economy, says Anderson.
According to his report, there are two clear reasons for preferring GQE to conventional methods. One is the need to move to an increasingly green economy, with GQE providing one opportunity and mechanism for funding such a transition. The other is that GQE provides money to productive projects, rather than hoping it will reach such projects through the finance system, which may absorb the funds.
UK Green MEP Molly Scott Cato, who commissioned the report, said: "Quantitative easing to date has further benefited wealthy elites. We need the money we create to be invested in a future we want to see. This public investment will create jobs for thousands of unemployed people while simultaneously building up our green infrastructure."
Transform articles
UK climate action disproportionately focused on cities, councils warn
The UK government has been “too city-focused” in its climate action and must provide more funding and support to reduce emissions in rural areas, the County Councils Network (CCN) has said.
COVID-19 offers the world a huge chance to beat a path to sustainability, says Oxford University professor Ian Goldin – but we must learn from past crises, he tells Huw Morris
The UK’s pipeline for renewable energy projects could mitigate 90% of job losses caused by COVID-19 and help deliver the government’s ‘levelling up’ agenda. That is according to a recent report from consultancy EY-Parthenon, which outlines how the UK’s £108bn “visible pipeline” of investible renewable energy projects could create 625,000 jobs.
The UK's largest defined benefit (DB) pension schemes have received a letter from the Make My Money Matter campaign urging them to set net-zero emission targets ahead of the COP26 climate summit later this year.
The total cost of waste crime in England has increased by 53% in just three years, and now costs the country nearly £1bn annually, a recent study has uncovered.
The oil and gas industry is set to burn through its allocated carbon budget 13 years early unless decisive action is taken immediately, new analysis has found.
Public money spent rescuing economies from the impact of COVID-19 is set to do more harm than good to the environment, new research suggests.
The sale of new diesel and petrol heavy goods vehicles (HGVs) will be banned in the UK by 2040 under proposals unveiled in the government's transport decarbonisation plan yesterday.
A coalition of investors representing over $6.6trn (£4.8trn) in assets have called for the EU's carbon price to treble by the end of this decade.
