The E-axes Forum on Climate Change, Macroeconomics, and Finance

The politics of green financial policies

Monica DiLeo (Hertie School) discusses the role of different public institutions in the green transition and examines what kinds of green financial policies are both institutionally and politically feasible.

Green Credit Guidance

Historically, central banks and other financial policymakers have played far larger roles in supporting structural economic transformations through the use of credit policies. In this Digest, Katie Kedward (UCL Institute for Innovation and Public Purpose) reflects upon the potential relevance of credit policies to support the green transition.

Green Investments and Rising Interest Rates

Jens van’t Klooster (University of Amsterdam) and Eric Monnet (Paris School of Economics and CEPR) look at how tight monetary policy impacts low-carbon investments. Most importantly, they suggest green credit policy instruments, central banks can use, that will enable them to address inflationary pressures without jeopardizing the long-term decarbonization of the economy.

Greenflation and implications for monetary policy

The recent experience with surging inflation, partly driven by supply shocks to the energy sector, has ampiflied concerns over “greenflation,” inflationary pressures resulting from the transition to sustainable energy sources. For this digest Conny Olovsson (ECB and Sveriges Riksbank) and David Vestin (Sveriges Riksbank) have curated the most recent literature on the theoretical and empirical findings on how greenflation arises and what central banks can do to curb it. They, and the papers they have chosen, highlight the central role for foresighted monetary policy as well as a smooth carbon taxation path.

Climate Risks in Financial Markets

Climate change has a destabilizing effect on financial markets. If market actors become overexposed to climate-sensitive assets, the ensuing market failure provides justification for central bank intervention to prevent cascading financial effects.

The impact of climate change on price stability

To secure price stability and fulfill their primary mandate, policymakers should act promptly: interest rate management, expectation anchoring, financial stabilization, cooperation with fiscal authorities are just some of the tools at their disposal.

Upload Research

  • Accepted file types: pdf, Max. file size: 50 MB.
  • This field is for validation purposes and should be left unchanged.

Subscribe to Our Newsletter

  • This field is for validation purposes and should be left unchanged.

Donate Now