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Globalization and climate protection: New idea for a global central bank
Economists propose a radical proposal to finance the trillions in investments for the energy transition. Globalization and green transformation in focus. #Energy Transition #Economists #GreenTransformation
Globalization and climate protection: New idea for a global central bank
The global transformation towards an environmentally friendly society requires enormous investments in the range of trillions. While wealthier countries should be able to raise these funds, poorer countries face greater obstacles. This is mainly because many of the required technologies have to be imported and foreign currency financing via the capital markets is often not feasible for these countries.
To ensure that global inequality does not hinder the green transformation, economists at Witten University have developed a radical proposal. This is based on a concept that goes back to Keynes' ideas from the 1940s. Their proposal includes the creation of a Global Central Bank (GZ) that would issue its own currency called ECOR and would be used specifically for climate protection projects.
The ECOR can only be traded in connection with environmental protection projects and serves as a means of payment between the central banks of participating countries. This enables an NGO in Bolivia, for example, to purchase solar panels from China without having to rely on traditional financing channels. This form of innovation could represent a win-win situation in which projects can be realized that would otherwise not be financeable.
Adapting the global economy to a green age is a task for all of humanity and requires cooperation at a supranational level. As a result, future political changes in individual countries may have less influence on the implementation of environmentally friendly measures. However, despite these findings, there may be challenges in seeing this analysis shared by all policymakers.