Green QE and carbon pricing: looking at potential tools to fight climate change

Raphael Abiry, Marien Ferdinandusse, Alexander Ludwig and Carolin Nerlich

Research Bulletin, 2022, vol. 99

Abstract: While there is broad consensus that carbon pricing is an effective instrument for combatting climate change, the potential contribution of central banks is still debated. Central banks around the world have adopted different strategies to consider climate change in their monetary policy frameworks. This article focuses on green quantitative easing (QE). Compared with a carbon tax, we find that green QE would contribute only moderately to reducing global temperatures, while partially crowding out green private investment. However, green QE could serve as a complementary instrument, especially if governments fail to coordinate on introducing a sufficiently ambitious carbon tax on the global scale. JEL Classification: E51, E62, Q54

Keywords: Carbon Tax; Climate Change; Green Quantitative Easing; Integrated Assessment Model (search for similar items in EconPapers)
Date: 2022-09
Note: 673741
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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