Climate Change Mitigation: How Effective is Green Quantitative Easing?

Raphael Abiry, Marien Ferdinandusse, Alexander Ludwig and Carolin Nerlich
Additional contact information
Raphael Abiry: Goethe University Frankfurt (E-mail: abiry.econ@gmail.com)
Alexander Ludwig: Goethe University Frankfurt, ICIR & CEPR (E-mail: mail@alexander-ludwig.com)
Carolin Nerlich: European Central Bank (E-mail: Carolin.Nerlich@ecb.europa.eu)

No 22-E-11, IMES Discussion Paper Series from Institute for Monetary and Economic Studies, Bank of Japan

Abstract: We develop a two sector incomplete markets integrated assessment model to analyze the effectiveness of green quantitative easing (QE) in complementing fiscal policies for climate change mitigation. We model green QE through an outstanding stock of private assets held by a monetary authority and its portfolio allocation between a clean and a dirty sector of production. Green QE leads to a partial crowding out of private capital in the green sector and to a modest reduction of the global temperature by 0.04 degrees of Celsius until 2100. A moderate global carbon tax of 50 USD is 4 times more effective.

Keywords: Climate Change; Integrated Assessment Model; 2-Sector Model; Green Quantitative Easing; Carbon Taxation (search for similar items in EconPapers)
JEL-codes: E51 E62 Q54 (search for similar items in EconPapers)
Date: 2022-07
New Economics Papers: this item is included in nep-ban, nep-dge, nep-env and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Related works:
Working Paper: Climate Change Mitigation: How Effective Is Green Quantitative Easing? (2022)
Working Paper: Climate Change Mitigation: How Effective is Green Quantitative Easing? (2022)
Working Paper: Climate change mitigation: how effective is green quantitative easing? (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:ime:imedps:22-e-11

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