Work

Green Monetary Policy and the creation of new money for the green transition

Year: 2026

Type: article

Abstract: In this article, we propose Green Monetary Policy (GMP) to systemically finance the green transition, moving beyond traditional redistributive mechanisms. We introduce two new tools: Green Quantitative Easing (GQE) and Green Digital Currencies (GDCs). These enable central banks to create new money explicitly for sustainable investments. By embedding sustainability into monetary creation, GMP reduces political resistance, minimizes regulatory complexity, and offers a proactive, inclusive framework for climate governance.

Source: npj Climate Action

DOI: 10.1038/s44168-026-00371-5

Authors: Thomas Kalinowski, Stefan Brunnhuber

Institutions: Ewha Womans University, World Academy of Art and Science

Language: English

Topic: Sustainable Finance and Green Bonds

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Climate action

Open Access status: gold

Estimated APC paid: $1,340