Arbeitspapier

Emission-based interest rates and the transition to a low-carbon economy

We use a dynamic general equilibrium model to study a climate-oriented monetary policy in the form of emission-based interest rates set by the central bank. Liquidity costs of banks increase with the emission intensity of their asset portfolio, leading banks to favor low-carbon assets and to improve the financing conditions for clean sectors. We show that such a monetary policy supports the decarbonization of the economy and reduces climate damage, as more resources are channeled to low-carbon sectors and incentives to adopt cleaner technologies increase across all sectors. We illustrate these effects by calibrating our model to data for the Euro Area.

Sprache
Englisch

Erschienen in
Series: Economics Working Paper Series ; No. 20/337

Klassifikation
Wirtschaft
Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems
Monetary Policy
Central Banks and Their Policies
Environment and Growth
Thema
climate change
monetary policy
banks
innovation
financial stability

Ereignis
Geistige Schöpfung
(wer)
Böser, Florian
Colesanti Senni, Chiara
Ereignis
Veröffentlichung
(wer)
ETH Zurich, CER-ETH - Center of Economic Research
(wo)
Zurich
(wann)
2020

DOI
doi:10.3929/ethz-b-000421404
Handle
Letzte Aktualisierung
10.03.2025, 11:41 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Böser, Florian
  • Colesanti Senni, Chiara
  • ETH Zurich, CER-ETH - Center of Economic Research

Entstanden

  • 2020

Ähnliche Objekte (12)