9. Best Practices and Case Studies

In fact, we do have a two-tier capital market. The EU and the USA can purchase their own bonds through their central banks. Developing countries cannot. For example, Ghana’s debt to GDP ratio was lower (83%) than Greece’s (over 200%) or Portugal’s (130%) in 2021, yet the rating agencies rate the creditworthiness of Ghana at B3, Greece at Ba3 and Portugal at Baa2. Ghana has to pay around 9% on a ten-year bond, whereas Greece and Portugal pay just 1.3% and 0.4%, respectively. Ending money laundering in OECD countries and allowing a credit currency swap that covers the difference would allow LDCs to fund their own pathway towards a green future.

About two-thirds of fossil reserves are still in public ownership, and so can be managed differently than private assets. A similar figure applies to the amount of CO₂ emissions worldwide, with only 15–32% attributable to listed private companies, while the rest remain in the control of state-controlled firms. See https://​carbontracker.​org/​

Technically speaking, monetary regulators do at least causally control the interest rate in two markets: the inter-banking sector and the state bond market.

See Blockchain for Biodiversity Finance at https://​www.​youtube.​com/​watch?​v=​74A_​DVuiXeA

In order to boost this initiative, we should add a deworming campaign, like the one which eradicated schistosomiasis and helminthiasis at a cost of 30 cents/person with a huge ROI for the private and public sectors. Empirically, school absenteeism is correlated with worming. About 1.5 billion children are affected, which causes an up to 30% reduction in income later in life. On top of this, we could prevent 150,000 additional premature deaths. See Banerjee and Duflo (2019).

The ECB started with 10% of GDP in 2008, equivalent to one trillion euros, and reached 60% of GDP (6.7 trillion euros) in 2020. Over this period, the ECB printed 3% additional money every year. If this procedure were organised differently, using different monetary channels, it would generate more wealth for all of us.

If we follow the current debate, we will realise that a green CBDC and the extended central bank mandate associated with it are consistent with the main body of the Maastricht Treaty (!). The update to the monetary system that is needed would not require all euro member states to approve new binding laws. Only three articles would be affected: Article 127, which regulates central bank mandates with regard to price stability (inflation); Article 128, which regulates the issuing of bills and coins (digital currencies); and Article 136, which allows central banks and associated institutional bodies to create additional liquidity, under ‘specific conditions’ (asymmetric shocks) that negatively affect the CPI. Experts in EU monetary policy, however, recommend a parliamentary debate and hearing in each euro member state. (Incidentally, the reason why the 800 billion euros for the NextGenerationEU project to finance our future did not refer to Article 136 was that some member states did not want the additional money to be tied to certain projects.) See Council of the European Communities and Commission of the European Communities (1992) and Bank of Canada (2020).