This isn’t Green QE

So, the Bank of England muses about climate change, central banks and greenery:

For example, should central bank monetary policy be charged with a green agenda? Should central banks take it upon themselves to encourage and support the formation of liquid environmentally-focused markets?

That’s just one of the ‘unconventional’ areas the BoE’s One Bank Research agenda — revealed by the Bank on Wednesday — is keen to explore in a bid to stay ahead of fundamental change affecting the economy and financial stability in the market.

One example given is climate change bonds. Another insurers and their reactions to extreme weather events. But then here’s Ritchie:

It was five years ago that Colin Hines and I created the idea of Green quantitative easing. It looks possible we may now get it.

Green QE is the idea that the BoE prints more money to spend on green things. And that isn’t one of the ideas under discussion. So, no.

12 thoughts on “This isn’t Green QE”

  1. So Much for Subtlety

    One example given is climate change bonds.

    Well I am all for parting fools and their money. How about they sell some bonds to Greenies which pay out according to how much the planet warms? It would be perfectly Green in that the warmer the planet gets, the less money the State has, the higher the taxes they need and hence the lower over all economic activity.

    But it is tragic to see the morons marching through the institutions. What do you do when your ruling class is committed to de facto treason?

  2. The job of a central bank is PURELY to maximise employment in as far as that is consistent with acceptable inflation. As to WHAT FORM any increased spending or aggregate demand should take, that’s fiscal: it’s the job of democratically elected politicians.

    Personally I’m all for subsidising renewable energy sources, but the amount spent on that (or on education, health, defence, etc etc) is quite clearly a POLITICAL decision and should be left to the electorate and politicians.

    Positive Money manages to get the above distinction between the TECHNICAL job done by central banks and the POLITICAL DECISIONS taken by politicians right. Pity others aren’t so smart.

  3. Bloke in North Dorset

    @smfs

    I’m all for not giving fools any money, especially if any of it is mine.

    If they’ve made it themselves or inherited it, then by all means lets part them from it before they do any damage.

  4. The LHTD is claiming that the BoE are looking at Green QE.

    Which is stretching the truth to outright lying point.

    They are looking at climate change as ONE of the topics under “fundamental changes”.

    He’s taken that the BoE are considering what (if any) affect climate change might have, a poorly written FT article and jumped to the conclusion that they must be listening to the utter nonsense he’s spouting about Green QE.

  5. Tyler

    I spent some time looking through the BoE website and publication trying to find evidence for this claim. As you say, it’s a discussion document that covers a breadth of topics that could affect the Bank. Nowhere are any “solutions” mentioned.

    I wonder if the FT journalist had a briefing where a Bank bod who had basically said “we’ve a lot of things to look at and think about”, and the journo has extrapolated. Wouldn’t be the first or last time.

    Ritchie’s then spunked his load over the article and assumed that his ideas are being put in place.

    I very much doubt that the BoE are feeding him inside info on their future plans. If they are then we are well and truly fucked.

  6. Actually bonds that payout to greenies in event of warming is a great idea. Gives govt incentive to avoid, compensates greenies of right. I am greenish, might buy some

  7. So Much for Subtlety

    Luis Enrique – “Actually bonds that payout to greenies in event of warming is a great idea. Gives govt incentive to avoid, compensates greenies of right. I am greenish, might buy some”

    The problem is what to do with the money. Not for me – if I sold these, I would simply spend it all on cocaine, hookers and fine malt scotch. But in general. It should go to some form of mitigation. What that should be I don’t know. It would be hard to find a cost-effective form of mitigation that would do one little bit of good. More efficient stoves in the Third World would be the best bet I guess.

    As an instrument it would not be hard to structure or finance a derivative like this. The mechanism is not hard. If they are not available, the demand must not be there.

  8. bloke (not) in spain

    ” bonds that payout to greenies in event of warming is a great idea. ”
    Undoubtably.
    On past performance greenies’d define warming, whatever the climate. If the temperatures dropped 25deg & a mile thick ice-cap had formed across the entire UK the greenies’d be shivering in their yurts screaming “Global Warming!”
    They couldn’t lose.

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