Yes, there is enough money to decarbonize the economies of high-income countries justly and sustainably

This year a number of factors have converged to substantially increase the impetus for a credible, effective programme to radically decarbonize the economies of high-income countries, particularly in the EU but also more broadly, in ways that would reduce economic inequality and are just and sustainable. These include the European Commission’s European Green Deal, Coronavirus Recovery Plan and revamped Hydrogen Strategy; international calls for a green, sustainable and just coronavirus recovery; a global revival of Keynesian supply-side economics; and increasing interest in direct central bank funding of government stimulus programmes. In this essay I offer a first attempt to draw these elements together to suggest what might be a coherent strategy for action, at least for countries with stable, resilient currencies. One of the key elements would be for central banks to finance their governments’ decarbonization programmes directly by buying government bonds and holding them in perpetuity as insurance against misallocation of funds. The losers in such a strategy would be elements in the finance sector which have come to rely on virtually free bailouts and handouts from central banks via quantitative easing programmes. Resistance to the proposed strategy would probably be fierce from these quarters.