Ihe European Central Bank (ECB) is moving from words to climate action. Its dashboard began to turn green with the publication, on January 24, of a whole set of climate indicators. This is little in the face of the climate emergency, but a lot compared to the “climate mutism” of the American Federal Reserve or the slowness of States to keep their climate commitments. As its monetary tightening continues and makes financing more expensive, the ECB does not want to become the scapegoat for the delays in the ecological transition.
These are also the terms used two weeks earlier, on January 10, by Isabel Schnabel, member of the Executive Board and of the Governing Council of the ECB, where the monetary policy of all the countries of the euro zone is decided: “It would be misleading to use higher interest rates as a scapegoat for further delay in the green transition. »
This speech, which tries to reconcile the current monetary policy of the ECB and the fight against climate change, deserves an exegesis.
States singled out
First, because through two neologisms built on the model of stagflation, “climateflation” and “fossilflation”, the ECB recognizes the structural part of inflation. While, more often than not, the causal link between the fight against climate change and inflation is ignored or reversed (by attributing an inflationary effect to the transition, “greenflation”), it is here, on the contrary, the persistent inflationary pressures caused by climate change and our dependence on fossil fuels which are underlined by this speech. This is undoubtedly the best way to justify the climate action of the central bank, because it becomes a condition for the restoration of price stability, the heart of the mandate of the Frankfurt institution. Enough to convince those who still doubt that monetary policy has something to do with the climate…
Next, the ECB agrees that in return for its independence it has to render accounts and explain its line of conduct. This is important for its democratic legitimacy. However, his speech affirms, more than it explains, the validity of the current orientation of its monetary policy and underlines the responsibility of the States – more than his own – in what slows down the ecological transition: the latter do not are not implementing their climate commitments quickly enough and continue to subsidize fossil fuels when massive green investments are needed.
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