3. United Nations (UN) member states
signed the latest climate agreement, The
Paris Agreement, in 2015; which set an
international target to limit average global
warming to two degrees celsius above
pre-industrial temperatures.
4. An important question then arises: how do
we achieve this, and how much will it cost
to keep global warming below the two
degree target?
5. An estimation made on 2017 by the UN
itself shows $1 trillion per year will be
required to stay below the targeted global
temperature rise of 2C.
6. Where does the money come from?
Collecting more national debt might be the
only way to meet this financing needed to
reach the goal of global warming.
Quantitative easing or simply creating new
money might just be the answer.
7. How much does it costs to the economy?
An estimation of ourworldindata gives a
surprising costs to be incurred in mitigating
the impacts of climate change. The
estimated total global economic cost
would be €200-350 billion per year by
2030, less than 1% of the global GDP.
8. What if the target is 1.5 C ?
To stay below a temperature rise of 1.5C
(zero emissions by 2050), we need to
scale up and accelerate the move
towards 100% renewable energy. A rough
– and unofficial – estimate says this will
need annual investment of $1.5 to $2tn.
9. What if the target is 1.5 C ?
Another unofficial estimate shows that
the upfront annual capital investment
needed to reach zero emission (by 2050)
would be €530 billion by 2020 and €810
billion by 2030. These figures would
greatly exceed in mitigation strategies.
10. The role of central banks
Since the beginning of the financial crisis
2008, FED have created trillions dollar to
stabilise the global financial system.
Many private sector banks and financial
institutions were bailed out by buying up
private and public bonds worth billions.
11. The role of central banks
The European Central Bank (ECB) is still
buying assets with newly created money
of €60bn per month to stimulate the
economy in the eurozone and prevent
deflation.
12. How long the money printing lasts?
This is possible unless the central banks
become insolvent since they have got
monopoly on their own currency to issue
(print) the money as as legal tender.
13. How long the money printing lasts?
The central banks would again buying
bonds with newly created money to
finance the climate change. Some have
already proposed green climate bonds,
which would be issued by the Green
Climate Fund (GCF).
14. What does money printing do?
Economists rarely talk about money
printing as printing of physical currency.
Money printing more importantly provide
convenient physical tokens for
transferring assets between balance
sheets, helping these to be inflated.
15. Results is Inflation & Money Illusion
Current (2018) worth of US household
assets is about $103 trillion whereas the
physical money printed worths about $300
billion. Message here is clear that a small
amount money printing inflates the balance
sheet by its multiple through Money
Illusion.
