The IMF posted a blog on its website yesterday under the title:
A Role for Financial and Monetary Policies in Climate Change Mitigation
It summarised the options like this:
Much of what I have been writing about funding the Green New Deal recently, here and here, fits into this framework.
So, I argue for green bonds, which are financial securities.
And I ask for pension fund reform.
Whilst my work on Sustainable Cost Accounting is all about the first item on the fiscal agenda.
And changing pension and ISA regulation might fit into the fourth item.
But I also like the references to Green QE. It's come a long way from its first ever outing here, in 2010:
I am aware that green quantitative easing remains controversial, and I see it (and always have) as a backstop. But I also consider it a pretty essential one.
I have no doubt we will see it in action soon: a recession is coming and the Green New Deal will be the only way out of it.
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Policies suxh as the GND were necessary in 1972: Limits to Growth https://en.wikipedia.org/wiki/Club_of_Rome or 1990: IPCC https://en.wikipedia.org/wiki/IPCC_First_Assessment_Report. It might have appeared reasonable after Dec 2018: IPCC in Poland https://www.ipcc.ch/event/the-ipcc-at-cop24/. But the current reality is as Mayer Hillman wrote https://www.theguardian.com/commentisfree/2018/oct/30/climate-change-action-effective-ipcc-report-fossil-fuels?CMP=share_btn_tw:
“In tackling climate change there are three options:
1 Stop using ANY fossil fuels;
2 Minimise their use;
3 Carry on as we are.
These are the choices. There are no others. ONLY ONE WILL WORK!
Either we cut out fossil fuels completely, or we pass on a dying planet to our children.”
All of us are deep wired to believe that we can carry on as we are — but there is not enough time to switch even ten per cent of the world’s cars to electric – even if there weren’t serious resource constraints (copper from the Peruvian Amazon https://www.voanews.com/americas/protest-begins-against-billion-dollar-southern-copper-mining-project-peru, lithium for batteries from Chile and the Congo https://www.bbc.co.uk/news/business-49355817)
Rationing polices https://www.flemingpolicycentre.org.uk/teqs/ — with the allocation for each year lower than that for the one before, could — would – begin to reduce the UK’s carbon footprint. What is more, the carbon cost of implementing GND WITHOUT RATIONING will simply reinforce the reality of Greta Thunberg’s assertion https://www.politico.eu/article/global-climate-icon-finds-that-political-change-is-complicated/ that ‘Basically, nothing is happening.’ If you don’t believe her, look at CO2.Earth https://www.co2.earth/
I’m somewhat torn between Mr Burlington’s “all hands on deck we have an emergency” comment and the feeling that the IMF table is BAU (business as usual with some nudges). In the case of transport – people from companies such as Thyssen-Krupp take the view that there will need to be radical change – fro example a move away from the current OMOC (one-man, one-car) style of transport – globally. This would to a large extent address the resource problem wrt transport . As for copper – & the discussions about going-electric to de-carbonise (which would drive copper demand) this approach ignores other possibilities such as re-purposing the existing gas system (convert from nat gas to hydrogen – produced by renewables). This approach would reduce the need to build out the power network – which would be a big driver of copper demand.
With respect to finance – the problem is two fold – we need a very large expansion indeed of renewables (roughly 10x what we have – I’m talking EU now – same could apply in other locations) – with, probably a 60/40 split large scale vs embedded/small scale. The problem is the up-front investment needed – which dwarfs current financial activity. Expressed another way – there is simply not enough money currently in the system to fund what needs to be done (whilst keeping other societal activity going). Thus, whilst Richard takes the view that Green QE is a backstop, at the moment my view is that it is more likely to sit front and centre. I do not have a hard & fast view on this & as Keynes remarked: when the facts change, I change my views.