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  • will we do whatever it takes?

  • It's a tackle.

  • Climate change.

  • I come at this question not as a green campaigner, if I confess to being rather hopeless, that recycling I committed as a professional observer of financial policy making and someone that wonders how history will judge us.

  • One day this ring that belonged to my grandfather will pass to my son Charlie, and I wonder what his generation, and perhaps the one that follows will make of the two lives this ring has worked.

  • My grandfather was a coal miner in his time, burning fossil fuels for energy and for allowing economies to develop was accepted.

  • We know now that that is not the case because of the greenhouse gases that co produces.

  • But today I fear it's the industry in which I work in that will be judged more harshly because of its impact on the climate more harshly than my grandfather's industry.

  • Even I work course in the banking industry, which will be remembered for its crisis in 2008 a crisis that diverted the attention and finances of governments away from some really, really important promises, like promises made at the Copenhagen climate summit in 2009 to mobilize $100 billion a year to help developing countries move away from burning fossil fuels and transition to using cleaner energy.

  • That promise is already in jeopardy.

  • And that's a really problem because that transition to cleaner engine needs to happen sooner rather than later.

  • Firstly, because greenhouse gases wants released a in the atmosphere for decades.

  • And secondly, if a developing economy builds its power grid around fossil fuels today, it's gonna be way more costly to change later on.

  • So for the climate, history may judge that the banking crisis happened at just the wrong time.

  • This story need not be this gloomy them three years ago.

  • I argue that governments could use the tools deployed to save the financial system to meet other global challenges.

  • And these arguments are getting stronger, not weaker with time.

  • Let's take a brief reminder of what those tools looked like When the financial crisis hit in 2008 the central banks of the U.

  • S and U K began buying bonds issued by their own governments and a policy known as quantitative easing, depending on what happens to those bonds when they mature This is money printing by another name on boy.

  • Did they print the U.

  • S alone created $4 trillion worth of its own currency.

  • This was not done in isolation.

  • In a remarkable act of cooperation, the 188 countries that make up the International Monetary Fund the IMF agreed to issue $250 billion worth of their own currency, the special drawing right to boost reserves around the world.

  • When the financial crisis moved to Europe, the European Central Bank president, Mario Draghi, promised to do whatever it takes.

  • And they did.

  • The Bank of Japan repeated those words that exact same commitment to do whatever it takes to reflect their economy.

  • In both cases, whatever it takes meant trillions of dollars mawr in money printing policies that continue today.

  • What this shows is that when faced with some global challenges, Porc makers are able to act collectively with urgency and run the risks of unconventional policies like money printing.

  • So let's go back to that original question.

  • Can we print money for climate finance?

  • So three years ago, the idea of using money in this way was something of a taboo.

  • Once you break down and dismantle the idea that money is a finite resource.

  • Governments can quickly get overwhelmed by demands from their people to print more and more money for other causes.

  • Education, healthcare, welfare, even defense.

  • And there is a truly terrible historical examples of money printing, uncontrolled money printing, leaving toe hyperinflation.

  • I think Weimar Republic in 1930 Zimbabwe more recently in 2008 when the prices of basic goods like bread a doubling every day.

  • But but but But but but not every money printing policy is the same each day.

  • There is stronger and stronger counterpoint examples to those bad outcomes, namely that central banks printing money but operating within their mandated rules policy can work six years on, since the financial crisis.

  • Inflation in those countries that did the printing, it isn't just absent, it's laughing.

  • And the fact that a conservative institution like the European Central Bank, which was originally skeptical of the policy, has actually begun to implement it this year in 2015 shows the policies growing acceptance.

  • All of this is moving the public debate forward so much so that money printing for the people is now discussed openly in the financial media and even in some political manifestos.

  • But it's important the debate doesn't stop here with printing national currencies because climate change is a shared global problem.

  • There are some really compelling reasons why we should be printing that international currency that's issued by the IMF to fund it.

  • The special drawing rights, or STR, is the IMF's Elektronik unit of account that governments use to transfer funds amongst each other.

  • Think of it as a peer to peer payment network like Bitcoin, but for governments and it's truly global.

  • Each of the 188 members of the IMF hold STR quotas as part of their foreign exchange reserves.

  • These are national stores of wealth that country's keep to protect themselves against currency crises and that global nature is why.

  • At the height of the financial crisis in 2009 the IMF issued those extra $250 billion because it served as a collective global action that safeguarded countries large on dhe small in one fell swoop.

  • But here he is the intriguing part.

  • More than half of those extra SDRs that were printed in 2950 billion dollarsworth went to developed market countries, who for the most part have a modest need for these foreign exchange reserves because they have flexible exchange rates.

  • So those extra reserves that were printed in 2000 and nine in the end for developed market countries at least weren't really needed, and they remain unused today.

  • So here's an idea.

  • There's a first step.

  • Why don't we start spending those unused those extra SDRs that were printed in 2009 to combat climate change?

  • They could, for example, be used to buy bonds issued by the UN's Green Climate Fund.

  • This was a fund designed to channel funds towards developing countries to meet their climate projects.

  • It's being one of the most successful funds of its type, raising almost $10 billion.

  • But if we use those extra SDRs that were issued, it helps governments get back on track toe meet that promise of $100 billion a year that was derailed by the financial crisis.

  • It could also could also serve as a test case.

  • If the inflationary consequences of using EST ers in this way are benign, it could be used to justify the additional extra issuance vest yards say every five years again with the commitment that developed market countries would direct their share of the new reserves to the Green Climate Fund.

  • Printing in the international money in this way has several advantages over printing national currencies.

  • The first is it's really easy to argue that spending money to mitigate climate change benefits everyone.

  • No one section of society benefits from the printing press over another.

  • That problem of competing claims is mitigated.

  • It's also fair to say that because it takes so many countries to agree to issue these extra str, it's highly unlikely that money printing would get out of control.

  • What you end up with is a collective global action aimed and it's a controlled global action aimed at a global good.

  • And as we flirt with the money printing schemes, whatever concerns we have could be allayed by rules.

  • So, for example, the issuance of these extra SDRs every five years could be capped such that this international currency is never more than 5% of global foreign exchange.

  • Is this That's important because it would relay.

  • Let's say that ridiculous concerns that the U.

  • S.

  • Might have that the str could ever challenge the dollars dominant role in the international finance and in fact, I think the only thing that the stR would likely steal from the dollar under this scheme is its nickname the greenback.

  • Because even with that cap in place, the IMF could have followed up its issuance its massive issuance of SDRs in 2009 with a further $200 billion of str in 2014.

  • So hypothetically that would mean that developed countries could have contributed up to $300 billion worth of str the Green Climate Fund.

  • That's 30 times what it has today and you know what?

  • As spectacular as that sounds, it's only just beginning to look like whatever it takes.

  • And just to think what amazing things could be done with that money, consider this.

  • In 2009 Norway promised $1 billion of its reserves to Brazil if they followed through on their goals on deforestation.

  • That program has since delivered a 70% reduction in deforestation in the past decade.

  • That's saving 3.2 billion tons of carbon dioxide emissions, which is the equivalent of taking all American cars off the roads for three whole years.

  • So what could we do with 300 other pay for performance climate projects like that organized on a global scale?

  • We could take cars off the roads for a generation.

  • So let's not quibble about whether we can afford to fund climate change.

  • The real question is, do we care enough about future generations to take the very same policy risks we took to save the financial system?

  • After all, we could do it.

  • We did do it, and we are doing it today.

  • We must must must do whatever it takes.

will we do whatever it takes?

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我們可以通過印錢來拯救地球嗎?| 麥卡夫|TED研究所 (Can we print money to save the planet? | Michael Metcalfe | TED Institute)

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    林宜悉 發佈於 2021 年 01 月 14 日
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