Net zero: an unprecedented financing dilemma

The green transition presents an unprecedented financing dilemma.

The long-term financing requirement for countries to meet the net zero transition will require very large annual outlays, with the private sector taking on the lion’s share if these ambitious targets are to be met. With public debt also at unprecedented levels in most advanced countries – following unusually large fiscal outlays to deal with recent shocks – it is difficult to see how governments could consider contributing any sizeable amounts.

This begs the obvious question: What role can central banks play? Could accommodative monetary policy, similar to the long period of low policy rates following the Global Financial Crisis (GFC) be part of the solution?

You can now read the full whitepaper at the link below