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Central banks and climate justice: the case for green quantitative easing and its justification

Ferret Mas, J. (2023) Central banks and climate justice: the case for green quantitative easing and its justification. PhD thesis, University of Reading

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To link to this item DOI: 10.48683/1926.00114678


This thesis makes two distinct contributions to the debates on climate justice. First, it offers a range of policy proposals that central banks can implement to make a faster transition to a sustainable or ‘green’ energy system. Second, it addresses the normative issues raised by some of these green monetary policy proposals, which involve shifting part of the costs of climate change mitigation and adaptation onto future generations. The project draws together debates from climate justice, intergenerational justice, and the politics of central banking. By taking an interdisciplinary perspective on the problems created by climate change it aims at proposing policy options for the central bank to combat the effects of global warming, and it defends them from the perspective of moral and political philosophy. The argument starts from a distinction between two kinds of principles of intergenerational climate justice. There are principles that tell us to mitigate climate change in order to protect future generations, and principles that tell us how to share mitigation costs fairly across generations. I will present the case for Green Quantitative Easing or green central banking as a range of policies to serve both kinds of principles of intergenerational climate justice. First, I show that central banks can, and should, serve intergenerational climate justice by implementing policies that cut emissions and thereby reduce the climate burden on future generations. Second, I argue that some of these policies justly shift part of the financial costs of mitigation onto future people, promoting a fairer distribution of mitigation costs between the present and future generations. The thesis presents a range of policy options that a green central bank can implement to meet the two principles of climate justice. I start with milder proposals and end with more radical but still realistic ones that are intergenerational in scope. These more radical proposals can be seen as instances of 'borrowing from the future': This is the idea that we need to take climate action now, but we can shift some of the costs onto future generations. Given the power of central banks to create money and buy bonds that can be kept on their balance sheet, Green Quantitative Easing is superior to alternative strategies, such as a global carbon tax or the World Climate Bank envisaged by Broome and Foley. Moreover, unlike Broome and Foley, I suggest that policies that ‘make the grandchildren pay’ for mitigation are not justified only due to the present generation’s unwillingness to bear the costs of urgent climate action. I also defend cost-shifting in enthusiastic terms: as a means to promote intergenerational distributive justice. 8 The justice-based defense of Borrowing from the Future is grounded in the Intergenerational Ability to Pay Principle (IGAPP) as a guiding principle to share the burden of climate change mitigation and adaptation across generations. I draw from Caney’s well-known pluralistic account for the intragenerational case and offer a pluralistic account of burden-sharing principles for the intergenerational case. However, I depart from Caney by arguing that the IGAPP should apply to a broader set of costs. Finally, I respond to one important objection raised by Gardiner: that making our grandchildren pay is a case of intergenerational extortion. I conclude that Green Quantitative Easing is a superior strategy to the alternatives proposed: a strategy that promotes urgent climate action now, whilst fairly sharing the costs with future generations.

Item Type:Thesis (PhD)
Thesis Supervisor:Baderin, A.
Thesis/Report Department:School of Politics, Economics and International Relations
Identification Number/DOI:
Divisions:Arts, Humanities and Social Science > School of Politics, Economics and International Relations > Politics and International Relations
ID Code:114678
Date on Title Page:August 2022


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