The Guardian: We print money to bail out banks. Why can’t we do it to solve climate change?
In a column on the Guardian, Matthias kroll (World Future Council) argues creating new money might be the only way to meet the financial challenge of solving climate change.
Since the beginning of the financial crisis, central banks have created trillions to stabilise the global financial system. First they bailed out private sector banks, and then they bailed out governments by buying up private and public bonds worth billions. The European Central Bank is currently buying assets with newly created money of €60bn a month to stimulate the economy in the eurozone and prevent deflation, for example. All this is possible because central banks can never become insolvent in their own currency as they alone issue the legal tender.
But an important side effect of these bailouts has been the realisation that central banks could play a more active role with their monetary policies; newly created money can be used to finance urgent global tasks that would otherwise not be undertaken. Just a percentage of that spent to bail out private banks could pay for investments needed to stabilise the world’s climate
And further Kroll explains:
To provide the necessary financial resources ( a big part of the $100bn promised to the GCF), central banks would carry on with what many of them are doing already: buying bonds with newly created money. But instead of buying existing private and public bonds, central banks would buy our proposed green climate bonds, which would be issued by the GCF, to finance climate change mitigation and adaptation projects.
Read the whole piece here.